Kenyans have been linked to a massive student financial aid fraud investigation in the United States, where investigators estimate that criminals have stolen more than $200 million (approximately Ksh 25.8 billion) through fraudulent college enrolments and stolen identities.

The investigation, known as Operation Ghostbusters, involves an alleged network of criminals who used the personal information of American citizens to create fake student accounts and obtain government-funded education loans and grants.

According to the US Department of Justice, the fraud involved individuals operating in the United States and Kenya, with money allegedly moved across borders through bank accounts, wire transfers and cryptocurrency transactions.

The scheme targeted the Federal Student Aid programme, which provides financial assistance to eligible Americans pursuing higher education.

Investigators say the suspects obtained stolen personal information belonging to US citizens and used it to submit fraudulent applications through the Free Application for Federal Student Aid (FAFSA) system.

The applications were used to enrol fictitious students in colleges and universities. Once the institutions processed the financial aid payments, the money was allegedly redirected to accounts controlled by the fraudsters.

The supposed students never attended the classes for which the funding had been awarded.

More than $200 million in suspected losses

The Justice Department estimates that the wider fraud has resulted in losses exceeding $200 million, with investigations revealing thousands of suspicious applications and accounts.

In September and October 2026, investigators identified 830,840 potentially fraudulent Federal Student Aid identification records associated with nearly $130 million. They recommended that the Department of Education disable the affected identification records to prevent further misuse.

The FBI has separately identified more than $32 million in losses from similar ghost student schemes, with investigators suspecting that additional money was stolen.

Assistant Director Heith Janke of the FBI’s Criminal Division said the agency would continue tracking the money and pursuing those involved.

“To date, the FBI has identified more than $32 million in losses, with millions more suspected, in similar ghost student schemes,” Janke said.

Kenyan nationals among those facing charges

Several cases have exposed alleged connections between the fraud and individuals in Kenya.

In Nebraska, a Kenyan citizen identified as Francis Mogambi was indicted on 10 counts relating to theft of government money and aggravated identity theft.

Prosecutors allege that between November 2025 and May 2026, Mogambi worked with associates in Kenya to obtain stolen American identities and use them to submit fraudulent student aid applications.

He allegedly retained 30 per cent of the proceeds and transferred the remainder to his co-conspirators in Kenya.

A separate case in Virginia involves a Kenyan national accused of participating in a scheme that generated approximately $1.44 million in fraudulent student aid deposits.

The individual allegedly received more than 700 fraudulent deposits through multiple American bank accounts before transferring at least $1.3 million to accounts in the United States and Kenya.

In New Jersey, three defendants have also been arrested over allegations that they received fraudulent student aid payments through American bank accounts before sending money to associates in Kenya.

US and Kenya cooperate in investigation

The investigation has also resulted in an international cryptocurrency seizure involving more than $750,000, approximately Ksh97 million, from an account belonging to a Kenyan national connected to the scheme.

The Justice Department described the recovery as the first international seizure of its kind in Kenya in the history of its Fraud Division.

American investigators have been working with Kenya’s Directorate of Criminal Investigations, Asset Recovery Agency and Office of the Director of Public Prosecutions to identify suspects and recover the money.

Assistant Attorney General Colin M. McDonald said the operation would pursue individuals involved regardless of where they were operating.

“Whether you are in Nebraska, New Jersey, Virginia, or Nairobi, we will pursue you,” he said.

The investigation remains ongoing, with authorities warning that more suspects could be identified as they continue tracing the money.

All the charges remain allegations, and the accused are presumed innocent until proven guilty in court.