The Justice Department on Thursday charged five people in Operation Ghostbusters, a nationwide case built on students who do not exist. Prosecutors say the ring took the stolen identities of real Americans, opened federal student aid accounts in their names and enrolled what the department calls "ghost students" at colleges across the country. The department also announced the seizure of more than $750,000 in cryptocurrency tied to the scheme through a network associated with Kenyan nationals.

The indictments came from the U.S. Attorney's Offices for the Eastern District of Virginia, Nebraska and New Jersey. In one Virginia case, the indictment says a Kenyan national used multiple bank accounts to receive over 700 fraudulent refund deposits, totaling approximately $1,439,548. Once tuition and fees were paid, the department says, the leftover money was diverted to accounts controlled by foreign actors, with help from U.S.-based money mules.

The numbers behind the five defendants are the story. In September and October, investigators identified 830,840 potentially fraudulent student aid IDs tied to nearly $130 million and recommended the Department of Education disable them. There are now more than 40 open cases across 26 FBI field offices. "To date, the FBI has identified more than $32 million in losses, with millions more suspected, in similar ghost student schemes. This stops now," said Assistant Director Heith Janke of the FBI's Criminal Division.

Fox News reports the fraud dates to 2021. Under Secretary of Education Nicholas Kent said the Biden administration "had turned off nearly every fraud detection measure."

Assistant Attorney General Colin McDonald laid out how the scheme works at Thursday's news conference, Fox News reports. Once a fake applicant gets past the Department of Education, the aid money goes to the college where the ghost student is enrolled. After tuition and fees come out, the leftover federal funds land in bank accounts the fraudsters control, and the money often vanishes overseas to places like Kenya. McDonald said some fraudsters even stage a fake student in an online classroom so the school believes a real person is present, and the aim is to keep the ghost enrolled semester after semester.

McDonald described the human cost with one example, according to Fox News: an American who graduated high school and went straight to work to provide for his family, never applied to college, and one day found his name attached to a loan from a school hundreds or thousands of miles away. Fox News reports investigators estimate the losses could reach several hundred million dollars, and prosecutors allege some of the money moved abroad through fronts such as a Nairobi safari company. The Justice Department says intelligence from Kenyan law enforcement partners helped investigators seize the cryptocurrency, and McDonald said a team is already on the ground in Kenya.

The Virginia defendant, a Kenyan national, is charged with conspiracy to commit wire fraud and student aid fraud in a case that was under seal, and Assistant U.S. Attorney Brian Hood is prosecuting it, the department said. The department also says community colleges and universities began flagging fraudulent FAFSA applications in or about 2021, with refunds flowing to accounts opened in names other than the students who had applied. Kent said the Department of Education has saved taxpayers more than $2 billion in attempted student aid theft under President Trump and Secretary McMahon.

Every ghost student starts with a real American's stolen name, and the aid comes out of taxpayer money.

Prosecutors say they are "just getting started," with approximately 50 referrals already sent to 26 FBI field offices.