'Ghost Students' using AI to apply for student loans with stolen identities — DOJ's Operation Ghostbusters busts $200 million ring faking online college attendance, unsuspecting victims saddled with student debt they didn’t sign up for

What happened

Department of Justice (DOJ) just announced indictments resulting from Operation Ghostbusters, which investigated widespread student loan fraud. While the schools receive the majority of the proceeds of the fraudulent student loan, the remaining amount is funneled into the bank accounts of the fraudsters, who then use mules to move the money from U.S.

On the other hand, unwitting victims who have skipped college and instead directly joined the workforce after high school are saddled with student debt for a degree they never even signed up for. Multiple community colleges and universities across the United States started suspecting fraud in the Federal Student Aid (FAFSA) program in 2021.

Fraudsters are using the identities of high school graduates who skipped college to apply for student loans and steal the excess proceeds that do not go to schools. They use AI to keep the charade going and make it seem like the fake student is actually going to class.

According to the agency , bad actors used stolen identities to sign up for student loans and used AI to complete the application, making it appear that the fake student was attending online classes. has charged five perpetrators and seized more than $750,000 in crypto tied to the scheme.

government lost over $200 million because of this activity, and the U.S. Department of Education Office of the Inspector General referred the case to the FBI Richmond Field Office.

Currently, more than 40 open fraud cases involve 26 FBI field offices and 20 U.S. The DOJ called it Operation Ghostbusters, which has already resulted in the indictment of five individuals.