# Justice Department Charges Five in Aid Fraud Probe, Seizes More Than $750,000 in Crypto

By Riza Dagoc

Canonical URL: https://www.tokenpost.com/news/regulation/45062
Published: 2026-10-30T19:33:08.000Z
Updated: 2026-10-30T19:33:08.000Z
Section: Regulation

> The seizure came in September 2026 with help from Kenyan law enforcement. Investigators also flagged 830,840 potentially fraudulent FSA IDs linked to nearly $130 million in aid.

The Department of Justice (DOJ) announced charges against five people in an alleged federal student-aid fraud scheme and a seizure of more than $750,000 in cryptocurrency from an account tied to the case.

The account belonged to a Kenyan national connected to the alleged scheme. Investigators seized the funds in September 2026 with help from Kenyan law enforcement. The cases are part of Operation Ghostbusters, a nationwide investigation into alleged fraud involving stolen identities and federal student aid.

Prosecutors allege that people used stolen U.S. identities to enroll fake students, obtain federal aid and move refunds through U.S.-based money mules to associates overseas. Federal aid goes to schools first to cover tuition and fees; any excess can be refunded to students, including through direct deposit.

The five defendants include three people charged by criminal complaint in New Jersey, an unnamed defendant indicted under seal in Virginia and Francis Mogambi, who was indicted in Nebraska. The charges and allegations have not been proven.

In New Jersey, prosecutors allege the three defendants received more than $1 million in aid through accounts opened with stolen identities and transferred funds to alleged co-conspirators in Kenya. The case includes $1.5 million in intended losses.

In Virginia, prosecutors allege the unnamed defendant received more than 700 federal aid refund deposits totaling about $1,439,548 and transferred at least $1.3 million to accounts in the United States and Kenya. The indictment remains under seal.

Mogambi faces five counts of theft of government money and five counts of aggravated identity theft. Prosecutors allege he used stolen identities to obtain aid from November 2025 to May 2026 and kept 30% of the proceeds. The Nebraska case includes $20,000 in intended losses.

At an Oct. 29 news conference, Assistant Attorney General Colin M. McDonald described fraudsters using AI to complete coursework and make fake students appear to attend online classes. “It looks like the ghost student is actually completing the class,” McDonald said.

Investigators flagged 830,840 potentially fraudulent FSA IDs during September and October 2026 and linked them to nearly $130 million in aid. The IDs are suspected of being fraudulent, and the linked aid amount is not a confirmed loss. The broader scale of ghost-student fraud is estimated at well over $200 million.