Key facts
- Five individuals have been arrested in connection with a "ghost student" scheme.
- The scheme allegedly used AI to complete coursework and simulate student attendance.
- Over $750,000 in cryptocurrency was seized from a network associated with Kenyan nationals.
- Estimated total losses from the scheme approach $130 million.
- Over 830,000 potentially fraudulent federal student aid accounts were identified.
The US Department of Justice has charged five individuals in its first broad federal crackdown on a "ghost student" scheme that allegedly used artificial intelligence to steal student loans. The fraudsters reportedly used stolen personally identifiable information (PII) of Americans to pose as fake college students, apply for federal aid, and then divert leftover funds. The DOJ seized over $750,000 in cryptocurrency from a network associated with Kenyan nationals, and officials estimate total losses could approach $130 million from over 830,000 potentially fraudulent accounts.