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DOJ charges five in AI-driven 'ghost student' loan fraud scheme, seizes $750K crypto

The Justice Department charged five people in a scheme that used stolen identities to enroll fake students in colleges and collect federal student loan funds. Fraudsters allegedly used AI to complete coursework and simulate attendance in virtual classes, while funneling leftover aid money into accounts controlled by money mules. The DOJ also seized over $750,000 in cryptocurrency tied to a network linked to Kenyan nationals.

yro.slashdot.org · 2026-10-30

DOJ charges five in crackdown on AI-driven student loan fraud ring tied to Kenya

The Department of Justice announced charges against five people involved in a scheme that used stolen identities and AI to pose as college students and collect federal student aid. Investigators seized over $750,000 in cryptocurrency linked to a network of Kenyan nationals, describing it as the first international seizure of its kind tied to this type of fraud. The scheme involved buying victims' personal data, filing fraudulent FAFSA applications, and funneling leftover loan money through US-based bank accounts.

arstechnica.com · 2026-10-30