Five charged in US over ghost student scheme — Ars Technica
In the United States, the Department of Justice has charged five people as part of a large-scale investigation into a so-called ghost student scheme. According to investigators, its participants stole Americans’ personal data, submitted applications for federal student aid in their names, and received the remaining funds after tuition was paid. This was reported by Ars Technica.
The US Department of Justice said that it seized more than $750,000 in cryptocurrency from a network linked to Kenyan nationals as part of the case. Officials also reported more than $32 million in actual losses connected to specific defendants and suggested that the real amount could be significantly higher.
How the scheme operated
According to investigators, the scheme’s participants bought Americans’ personal data, primarily that of high school graduates who did not enroll in colleges. Using this data, they completed the FAFSA form to obtain federal financial aid and submitted documents to universities and community colleges.
The funds were initially sent to educational institutions to pay tuition and fees, while the remaining balance was transferred to bank accounts controlled by the fraudsters. According to the Justice Department, dozens of people in the United States opened such accounts and may have acted as financial intermediaries.
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Investigators said that the perpetrators partly used artificial intelligence to maintain the appearance of studying: they completed applications, carried out coursework, and created the impression that students were present in remote classes. In one episode cited by the Justice Department, one of the defendants received more than 700 disbursements of remaining federal student aid totaling about $1.44 million through several bank accounts.
Hundreds of thousands of suspicious accounts
The US Department of Education identified more than 830,000 potentially fraudulent federal student aid accounts created using US citizens’ personal data. If all of them are linked to the ghost student scheme, potential losses could reach nearly $130 million, officials said.
Victims of data theft may not know for years about loans taken out in their names until authorities begin demanding repayment. Such cases may also worsen the victims’ credit histories.
US authorities introduced additional online identity verification for FAFSA applicants. At the same time, educational organizations warn that automated systems may mistakenly flag genuine students as risky, delaying access to financial aid. To pass the verification, applicants must show identification through a camera in real time.
