WASHINGTON — The Justice Department on Thursday announced the first charges in Operation Ghostbusters, a nationwide investigation into a large-scale student aid fraud scheme built on stolen identities and fictitious college students, according to the department.
Prosecutors charged five defendants in three districts — the Eastern District of Virginia, Nebraska and New Jersey — and announced the seizure of more than $750,000 in cryptocurrency tied to the scheme, the department said. The work was led by the department’s new National Fraud Enforcement Division under Assistant Attorney General Colin M. McDonald, with several U.S. attorney’s offices. The charges are allegations, and the defendants are presumed innocent unless proved guilty.
Investigators said they had identified 830,840 potentially fraudulent Federal Student Aid identification accounts associated with nearly $130 million during September and October, according to the department. That figure is a count of suspect accounts flagged for review, not a final proven loss. Separately, the FBI said it had identified more than $32 million in losses in similar ghost student schemes, with more losses suspected. Officials estimated the wider problem under investigation could exceed $200 million and said the activity dated back to at least 2021.
In New Jersey, Mabed Patricia Utate-Alberto, Patricia Arisleydi Perez and George Arturo Alfau Mendez were charged with conspiring to commit wire fraud, in a case listing an intended loss of $1.5 million, according to the charging papers summarized by the department. In Nebraska, Francis Mogambi, a Kenyan citizen, faced five counts of theft of government money and five counts of aggravated identity theft, covering aid payments issued in other people’s names. In Virginia, a sealed indictment charged a Kenyan national, whom the department did not name, with receiving more than 700 fraudulent aid refunds totaling about $1,439,548 and moving at least $1.3 million to accounts in the United States and Kenya.
Officials described a simple pattern. Stolen identities were used to file Free Application for Federal Student Aid forms, enroll fictitious students, and collect refunds, in some cases with artificial intelligence used to complete applications and coursework so the ghost student appeared to be attending classes. Heith Janke of the FBI said the bureau’s work was continuing across the country.
The department said more than 40 investigations were open across 26 FBI field offices. What happens next is further indictments and court proceedings in the three announced cases, along with decisions by the Education Department on the flagged accounts. For the primary announcement, see the Justice Department’s Operation Ghostbusters release.
