A Kenyan man identified as Francis Smith Mogambi is among five suspects charged in the United States over an alleged student financial aid fraud scheme involving stolen identities and fictitious university enrolments.
The development comes as US authorities announce the seizure of more than US$750,000 (approximately KSh97 million) in cryptocurrency from an account belonging to an unnamed Kenyan national linked to the alleged network.
The US Department of Justice announced the charges and seizure on Thursday, October 29, following investigations under an operation dubbed Ghostbusters.
According to the department, Mogambi, a Kenyan citizen living in Lincoln, Nebraska, was indicted by a federal grand jury on October 19 on five counts of theft of government money and five counts of aggravated identity theft.
Prosecutors allege that between November 2025 and May 2026, Mogambi worked with associates in Kenya to obtain personal information belonging to American citizens and use it to enrol unsuspecting victims in US colleges and universities.
The identities were allegedly used to create fake applications for federal student loans and grants, with the resulting payments redirected to accounts controlled by members of the network.
Court documents cited by the Justice Department allege that Mogambi retained 30 per cent of the proceeds and sent the rest to his co-conspirators in Kenya.
He allegedly received about US$2,000 (approximately KSh260,000) weekly and sought to establish a business that would allow him to cash larger cheques without attracting tax obligations.
The department said Mogambi arrived in the US on May 15, 2024, after winning the Diversity Visa lottery and was later issued a permanent resident card. He has been arrested and detained pending trial.
The investigation has also exposed alleged links to other Kenyans operating in the United States and people based in Kenya.
In Virginia, another Kenyan national was indicted on October 21 over an alleged scheme involving more than US$1.4 million (about KSh182 million) in fraudulent student aid payments.
The unnamed suspect allegedly received more than 700 fraudulent refund deposits before carrying out thousands of financial transactions that moved at least US$1.3 million to accounts in the US and Kenya.
In New Jersey, three suspects were arrested over an alleged scheme in which more than US$1 million in student aid was obtained using stolen American identities.
Prosecutors claim the money was transferred to Kenyan associates linked to a purported safari company after the US-based suspects took their share. The Justice Department says it intends to pursue charges against two alleged accomplices based in Kenya.
The wider scheme involved creating so-called ghost students who were enrolled in educational institutions but never attended classes. Investigators say some fraudsters even used artificial intelligence to complete coursework and maintain the appearance of genuine enrolment.
US authorities estimate that the fraud could exceed US$200 million (approximately KSh26 billion), with more than 830,000 potentially fraudulent student aid accounts identified.
Assistant Attorney General Colin McDonald warned that investigators would pursue those involved regardless of where they were based.
“Whether you are in Nebraska, New Jersey, Virginia, or Nairobi, we will pursue you,” he said.
The cryptocurrency seizure was made with assistance from Kenya’s Directorate of Criminal Investigations, Asset Recovery Agency and Office of the Director of Public Prosecutions.
The Justice Department said its officials visited Kenya in September to discuss extradition, prosecution and recovery of funds allegedly stolen from American taxpayers.
The investigation is ongoing. Mogambi and the other accused persons are presumed innocent until proven guilty in court.