DOJ charges five in alleged $1.3 million student aid fraud scheme

The U.S. Department of Justice announced the results of a nationwide investigation into so-called "ghost students," charging five people accused of working with Kenyan nationals to steal more than $1.3 million from federal student financial aid programs.

Federal authorities describe ghost student schemes as fraud operations in which scammers steal an individual's identity, obtain student financial aid in that person's name and then disappear, leaving victims to deal with the consequences.

One victim, Murat Mayor, described discovering suspicious activity tied to his identity.

"We noticed that there was a lot of activity. There are a lot of applications, loan applications, grant applications, then we panicked," Mayor said.

Prosecutors said the five defendants charged in the latest operation represent only a portion of a much larger problem. Earlier this year, Eyewitness News and ABC News reported that community colleges have been among the hardest hit by ghost student fraud.

California's 116 community colleges serve about 2.2 million full- and part-time students. In 2024, the schools found that nearly one-third of all applications were fraudulent, resulting in an estimated $13 million in lost state and federal funds.

Federal officials said scammers are increasingly using artificial intelligence to submit large volumes of fraudulent applications and complete coursework intended to maintain enrollment status. In some cases, authorities said, individuals are hired to appear in virtual classes and pose as students.

"There will actually be someone in the name of the ghost student on the screen in the virtual class to perpetrate this ruse. And that person might be anywhere in the world, making maybe $1," Assistant Attorney General Colin M. McDonald said.

Federal prosecutors said the investigation remains ongoing and warned that the scope of the fraud extends far beyond the defendants charged so far. Authorities said scammers have stolen more than $200 million in student loan funds over the past five years.

McDonald said investigators will continue pursuing those responsible.

"If you steal American identities, if you steal taxpayer dollars, if you exploit programs meant to help students build their future, we are resolved to find you and prosecute you," he said.