ALEXANDRIA, Va. — The Justice Department said Thursday it has indicted five people in Operation Ghostbusters, a nationwide investigation into student aid fraud that used stolen identities to enroll fictional ghost students at colleges across the country.
Assistant Attorney General Colin McDonald announced the first charges at a news conference in Alexandria. The department said organized groups stole the identities of working Americans who had never applied to college and used the information to build fraudulent federal student aid accounts.
“These are not isolated errors,” McDonald said. “This is organized fraud at scale. Some use super intelligence to fill out college applications and complete coursework.”
“Some even create the appearance of a fake student in an online classroom to trick schools into believing a real person is present,” he said.
Investigators say the scheme has run since 2021 and may have cost taxpayers several hundred million dollars. The work now covers more than 40 open cases in 26 FBI field offices, the department said.
Prosecutors allege that after tuition and fees were paid, leftover grant and loan money was moved through people in the United States acting as money mules and sent abroad. One route, they allege, ran through a front described as a Nairobi safari company.
For the victims, the department said, the harm was personal. People whose identities were used were left with ruined credit and bills for an education they never received.
Authorities said they have seized more than $750,000 in cryptocurrency that was allegedly laundered through networks in Kenya.
“We have already sent a team to Kenya to be on the ground for purposes of rooting out this fraud scheme and figuring out how it works on the ground in Kenya,” McDonald said when reporters asked questions.
The announcement was made by the department’s National Fraud Enforcement Division. The speakers listed for the event were McDonald, First Assistant U.S. Attorney Theophani Stamos, FBI Assistant Director Heith Janke and Andrew Ferguson, vice chairman of the White House Task Force to Eliminate Fraud.
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