US warns Kenyans linked to student aid fraud scheme they will be pursued in Nairobi

NAIROBI, Kenya, Oct 30 – American authorities have put Kenyans suspected of participating in a multibillion-shilling student aid fraud scheme on notice, warning that geographical boundaries will not shield those accused of stealing money meant for genuine students.

The warning came from Assistant Attorney General Colin M. McDonald, who said investigators were prepared to track down suspects operating in Kenya as part of an expanding American crackdown on fraudulent claims for federal education funding.

On Thursday, October 29, 2026, the US Department of Justice announced criminal charges against five individuals and the recovery of more than $750,000 (approximately Sh97.5 million) in cryptocurrency allegedly connected to the network.

McDonald specifically mentioned Nairobi among the locations where investigators would pursue suspects, signalling Washington’s intention to extend the investigation beyond its borders.

He said the latest action targeted proceeds allegedly moved through a financial network associated with Kenyan nationals.

“Today, we are announcing charges against five defendants and the seizure of more than $750,000 in cryptocurrency tied to this scheme, and laundered through a network associated with Kenyan nationals,” McDonald said.

He added: “Whether you’re in Nebraska, New Jersey, Virginia, or Nairobi, we will pursue you and bring you to justice. The American people deserve better than ghost students, fake applications, and stolen aid.”

The investigation, known as Operation Ghostbusters, is focused on an alleged elaborate scheme in which criminals exploited the identities of American citizens to obtain education funding they were not entitled to receive.

Investigators say the suspects used stolen personal information to establish student profiles and register individuals in colleges, creating the appearance of legitimate applications for federal financial assistance.

Once the applications were approved, government-funded loans and grants were allegedly processed before the resulting payments were diverted into accounts controlled by the suspects.

Some of the money was then transferred through financial channels outside the United States, with investigators tracing part of the proceeds to networks associated with Kenya.

Kenyan agencies drawn into US probe

The investigation has brought American and Kenyan law enforcement agencies into a joint effort to identify suspects, follow the money and recover assets believed to have been obtained through the alleged fraud.

The US Justice Department has acknowledged the involvement of Kenya’s Directorate of Criminal Investigations, the Asset Recovery Agency and the Office of the Director of Public Prosecutions.

Their cooperation has helped American investigators pursue financial leads connected to individuals suspected of participating in the scheme.

The latest cryptocurrency recovery involved an account belonging to a Kenyan national whose identity has not been publicly disclosed.

The Justice Department described the operation as the first international seizure of its kind undertaken by its National Fraud Enforcement Division, highlighting the growing cross-border dimension of the investigation.

The crackdown has also exposed the scale of the suspected abuse of America’s student financing system.

Investigators have identified more than 830,000 potentially fraudulent Federal Student Aid accounts associated with nearly $130 million (approximately Sh16.8 billion).

The wider scheme is estimated to have generated losses exceeding $200 million (about Sh25.9 billion), although investigations are continuing to establish the full extent of the financial damage.

Fresh charges

Thursday’s announcement covered prosecutions in Nebraska, Virginia and New Jersey, where five defendants are accused of participating in separate aspects of the alleged fraud.

Among them is Kenyan national Francis Mogambi, who was indicted in Nebraska on October 19 over allegations that he used stolen American identities to obtain federal student assistance.

Mogambi faces five counts of theft of government money and five counts of aggravated identity theft.

Prosecutors allege that he worked with associates in Kenya to enrol individuals fraudulently in educational institutions, redirect their financial aid payments and retain 30 per cent of the money before forwarding the balance to his alleged accomplices.

The other cases involve alleged fraudulent applications and the diversion of student funding in Virginia and New Jersey.

American authorities say the operation will remain active as investigators work with Kenyan agencies to identify additional participants, trace suspected proceeds and pursue criminal and asset recovery proceedings.

The defendants face prosecution in the United States, where they will have the opportunity to respond to the allegations.

None of the charges amounts to a conviction, and all those accused are presumed innocent until proven guilty in court.