Kenyan man indicted as US widens probe into $130m 'ghost student' aid fraud

A Kenyan national who arrived in the United States in 2024 after winning the Diversity Visa lottery has been indicted over his alleged role in a nationwide scheme to defraud the federal student aid system. Francis Mogambi was charged by a grand jury in Nebraska on 19 October 2026 with five counts of theft of government money and five counts of aggravated identity theft. Prosecutors allege that between November 2025 and May 2026 he worked with associates in Kenya to steal the identities of US citizens and use them to enrol fictitious students in American colleges. According to prosecutors, Mogambi diverted the fake students' financial aid payments to himself, keeping 30 percent and sending the remainder to his associates in Kenya. The intended loss in his case was $20,000 (£15,000). Court documents say he received $2,000 a week and attempted to recruit another person into the scheme, telling the individual he needed a business that would let him cash larger cheques without paying taxes. Mogambi was arrested shortly after the indictment was returned and is being held in custody pending trial. He has not yet commented on the allegations against him. His case forms part of a wider investigation, dubbed Operation Ghostbusters, into the alleged use of stolen identities to enrol fictitious students and claim federal financial aid that resulted in losses of $130m in taxpayer funds. US authorities say the inquiry has so far produced five indictments involving Kenyan nationals, with a further 40 investigations still open. At a news conference on 29 October announcing the first charges, Assistant Attorney General Colin M McDonald, who heads the Justice Department's National Fraud Enforcement Division, vowed to pursue those responsible. "If you steal taxpayers' dollars, if you exploit a programme meant to help students, we are resolved to find you and prosecute you," he said. The Justice Department says those behind the fraud use what it describes as "super intelligence" to place fake students in classrooms and complete coursework, creating the appearance of attendance so that aid payments continue. "The goal is to keep the ghost student in school as long as possible. Semester after semester after semester stealing money from the taxpayers," McDonald said. The consequences extend beyond government losses. People whose identities are stolen can face unexpected student loan debts even if they never enrolled in college. "His identity was stolen, his credit is now at risk, and his name is on the bill," McDonald said of one victim. He also said nearly a third of community college applicants in California in 2024 had been identified as fraudulent. The suspected scale is large. Investigators identified 830,840 potentially fraudulent Federal Student Aid identification numbers associated with nearly $130m in September and October 2026 and recommended the Department of Education disable them, though that figure reflects aid tied to suspect accounts rather than confirmed losses. Stolen personal information was sometimes sold online for between $4 and $8, with fraudsters targeting low-income Americans who never had the chance to attend college. "In a flash, the money vanishes, often overseas in places like Kenya," McDonald said. The investigation has exposed alleged financial links between the US and Kenya. In September, US officials travelled to Kenya to work with local law enforcement on extraditions, prosecutions and the recovery of allegedly stolen funds. With Kenyan help, authorities seized more than $750,000 from a cryptocurrency account belonging to a Kenyan national connected to the wider scheme, which the Justice Department described as the first international seizure of its kind in Kenya. That seizure was not connected to Mogambi's case. In a separate case in Virginia, prosecutors allege a Kenyan national received more than 700 fraudulent student-aid refunds totalling about $1.44m, with at least $1.3m transferred through thousands of transactions to accounts in the US and Kenya. In New Jersey, three people have been charged with acting as money mules in a scheme to obtain more than $1m in federal student aid, allegedly keeping a portion of funds received through US bank accounts and transferring the rest to co-conspirators in Kenya linked to a purported safari company. If convicted, Mogambi faces a mandatory prison term of at least 10 years, according to the Justice Department, which says those convicted will also face orders for forfeiture of assets and restitution to victims.