US prosecutors have charged five defendants as investigators pursue an alleged cross-border network that used stolen identities to obtain federal student funding.
US authorities have seized more than $750,000, about Sh97 million, in cryptocurrency linked to alleged student aid fraud involving Kenyan nationals. The Justice Department described the recovery as its first international seizure of its kind in Kenya.
The department announced the seizure alongside charges against five defendants under Operation Ghostbusters. Investigators allege that conspirators used stolen American identities to enrol fictitious students in US colleges and universities.
Meanwhile, investigators have identified more than $32 million in losses from similar schemes. The Justice Department estimates the suspected value of the wider fraud at more than $200 million.
Student aid fraud cases link US accounts to Kenya
In New Jersey, three defendants allegedly worked with individuals in Kenya to obtain more than $1 million in federal aid. Prosecutors say they submitted fraudulent applications using stolen identities.
The defendants allegedly received refunds through US bank accounts, kept a share and transferred the balance to Kenya. Prosecutors linked the recipients to a purported safari company. Authorities arrested all three following a criminal complaint.
The Justice Department also identified two alleged co-conspirators in Kenya and said prosecutors intended to pursue charges against them.
In a separate Virginia case, a Kenyan national allegedly received approximately $1.44 million through more than 700 fraudulent refund deposits. The indictment also alleges involvement in thousands of transactions moving at least $1.3 million through US and Kenyan accounts.
Meanwhile, prosecutors in Nebraska charged Kenyan citizen Francis Mogambi with five counts each of government money theft and aggravated identity theft. They allege he kept 30 per cent of fraud proceeds and sent the remainder to associates in Kenya. He remains detained pending trial.
Kenyan agencies assist asset recovery
Investigators say the network diverted loan and grant refunds into accounts controlled by conspirators. They also allege that fraudulent coursework helped keep fictitious students enrolled across multiple semesters, allowing payments to continue.
The investigation began after the Education Department’s inspector general referred the matter to the FBI’s Richmond office. It now spans more than 40 cases across 26 FBI field offices and over 20 US attorney’s offices.
The cryptocurrency seizure followed a September visit to Kenya by US justice officials and partner agencies. Those discussions focused on extradition, prosecutions and asset recovery.
The US government credited Kenya’s Directorate of Criminal Investigations, Asset Recovery Agency and Office of the Director of Public Prosecutions with assistance and intelligence. The Justice Department said cooperation would continue to trace proceeds and pursue suspects outside the United States.
All defendants are presumed innocent unless prosecutors prove their guilt beyond a reasonable doubt.
