US Assistant Attorney General Colin McDonald during the announcement/SCREENGRAB

Kenyan nationals have been linked to a multimillion-dollar student financial aid fraud scheme in the United States involving stolen American identities and fictitious college students.

The US Department of Justice has announced charges against five people in three states following investigations under an operation dubbed Ghostbusters, which targets networks accused of fraudulently obtaining federal student loans and grants.

According to US authorities, more than US$750,000 (about Sh97 million) in cryptocurrency was seized from an account belonging to a Kenyan national linked to the alleged scheme.

Assistant Attorney General Colin McDonald said the operation aimed to protect American taxpayers and students from fraudsters exploiting federal financial assistance programmes.

“Today, we are announcing the first results of Operation Ghostbusters — a nationwide effort to stop a major fraud scheme targeting federal student aid, low-income Americans, and the American taxpayer,” McDonald said.

“The Department is charging five defendants and announcing the seizure of more than $750,000 in cryptocurrency tied to this scheme through a network associated with Kenyan nationals.”

The department warned that investigators would pursue suspects beyond American borders, including those believed to be operating in Kenya.

“If you steal American identities, if you steal taxpayer dollars, if you exploit programs meant to help students build a future — we will find you. Whether you are in Nebraska, New Jersey, Virginia, or Nairobi, we will pursue you,” McDonald said.

The indictments detail separate cases involving Kenyan nationals and their alleged American accomplices.

In Nebraska, a federal grand jury indicted a Kenyan citizen on October 19 on five counts of theft of government money and five counts of aggravated identity theft.

According to prosecutors, the Kenyan national allegedly used stolen identities between November 2025 and May 2026 to fraudulently obtain federal student financial assistance.

He is accused of working with associates in Kenya to enrol Americans in educational institutions using their stolen personal information before redirecting the financial aid payments to himself.

The indictment alleges that he retained 30 per cent of the proceeds and sent the remainder to his co-conspirators in Kenya. He was arrested and detained pending trial.

In a separate case in Virginia, another Kenyan national was indicted on October 21 over an alleged scheme involving more than US$1.4 million (Sh180 million) in student aid.

Prosecutors allege that the suspect received more than 700 fraudulent student aid refund deposits totalling approximately US$1.44 million through multiple American bank accounts before transferring at least US$1.3 million to accounts in the US and Kenya.

Meanwhile, three defendants arrested in New Jersey are accused of conspiring with individuals in Kenya to obtain more than US$1 million in federal student aid through fraudulent applications.

The three allegedly received the money through American bank accounts before transferring it, after taking their share, to Kenyan co-conspirators associated with a purported safari company.

The US government said it intends to pursue charges against two alleged Kenyan accomplices as investigations continue.

The alleged scheme involved creating fake student accounts through the Free Application for Federal Student Aid (FAFSA) using personal information stolen from American citizens.

According to authorities, the fictitious students were then enrolled in colleges and universities to facilitate the release of government-funded loans and grants, despite never attending classes.

The FBI said it had identified more than US$32 million (Sh4.1 billion) in losses from similar ghost-student schemes, with millions more suspected.

Assistant Director Heith Janke said investigators would continue pursuing those involved in the scheme.

“The FBI, working hand-in-hand with our partners at the Department of Education and Department of Justice, will follow all evidence, track every dollar, and pursue each criminal who seeks to exploit our nation’s systems,” he said.

The Justice Department estimates that the wider fraud scheme, which investigators believe has been running since at least 2021, could exceed US$200 million (Sh26 billion).

Kenya's Directorate of Criminal Investigations, Asset Recovery Agency and Office of the Director of Public Prosecutions are among the local agencies assisting the American authorities.