DOJ busts ghost students, seizes $750k in stolen financial aid sent to Kenyan safari outfit
WASHINGTON — The Justice Department unveiled charges against five people accused of orchestrating a sophisticated campaign to rip off federal financial aid by enrolling “ghost students” who existed only on paper — seizing about $750,000 in ill-gotten funds.The network operated in the US and Kenya, where a phony safari company banked the loot after applying to and then enrolling phony students in college, using stolen identification.The Kenyan scheme is believed to have netted about $2 million.Three of the five defendants — Mabed Utate-Alberto, Patricia Perez and George Mendez — were charged in New Jersey for acting as “money mules” opening bank accounts to send about $1.3 million to Kenya.
Two Kenyan citizens were indicted in Nebraska and Virginia.“This is organized fraud at scale,” assistant attorney general for fraud Colin McDonald said at a press conference, where he dubbed the effort “Operation Ghostbusters.”“Investigators believe this fraud has been ongoing since at least 2021, potentially reaching several hundred million dollars lost.In California, nearly 1/3 of community college applications submitted in 2024 were reportedly flagged as fraudulent.”McDonald said that the fraud is difficult to catch, especially with online classes, as the scammers use artificial intelligence to complete coursework and give the impression of attendance, sometimes even hiring actual people to appear on-screen using the stolen identifications.Undersecretary of Education Nicholas Kent, describing himself as a former low-income student, said that the new case “sends a warning that we are serious to fraudsters, both at home and abroad.”The Education Department has started to require applicants to show ID to fill out the Free Application for Federal Student Aid (FAFSA) form, Kent said, resulting in “nearly $600 million in savings in just six months.”Kent estimated that Trump adminsitration anti-fraud efforts had stopped more than $2 billion in f...