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DURHAM, N.C. (WTVD) — An I-Team investigation in collaboration with ABC News is uncovering a widespread identity theft scheme involving so-called “ghost students” — scammers who steal personal information, enroll in colleges, take out federal student loans, and then vanish.
What’s especially alarming: victims often don’t know their identity has been used until they’re suddenly on the hook for thousands of dollars in fraudulent student loan debt.
How the Scam Works
These “ghost students” aren’t students at all. Federal prosecutors say scammers steal identities, use them to gain admission to colleges, apply for financial aid, collect the money, and disappear, leaving taxpayers and victims to pay the price.
Authorities say the schemes are costing taxpayers hundreds of millions of dollars nationwide. One of those operations was run right here in North Carolina.
A $3.5 Million Scheme in Fayetteville
A Fayetteville woman, 59-year-old Cynthia Melvin, is currently serving federal prison time for leading a $3.5 million ghost student fraud scheme.
“She’s a grandmother, and from what we could tell, she abused her position of trust,” said W. Ellis Boyle, U.S. Attorney for the Eastern District of North Carolina.
In many cases, the “student” whose name is used has no idea their identity has been stolen.
“Sometimes the ringleader will steal a person’s identity completely,” Boyle explained. “The ghost student has no idea their name and identity are being used.”
In other cases, prosecutors say the fraud involves a partnership with the ringleader and a willing participant splitting the money. Sometimes, Boyle said, it’s an in-between.
“Maybe there was good intention for that student at the beginning, and the ringleader helped in a legitimate, coursework. It didn’t work out for whatever reason. They do one semester, and then they’re not back at the school,” he said. “But the ringleader just takes that information and keeps extending it without the straw student or the ghost student’s knowledge.”
Victims Discover the Fraud Too Late
The ABC News investigative unit found one family that learned firsthand just how damaging these schemes can be.
Murat Mayor and his teenage son discovered their identities had been stolen while applying for college financial aid. Someone had already used their personal information to enroll them in community colleges across the country — and applied for loans and grants in their names.
“We noticed there were a lot of applications, loan applications, grant applications,” Mayor said. “Then we panicked.”
Why Community Colleges Are Targets
Experts say community colleges are often targeted because their enrollment process is more accessible and streamlined. Local schools, including Durham Tech, say they’ve put safeguards in place to protect students and taxpayers.
“There’s several mechanisms that we have in place that help support our college in defending. Two requirements in particular are related to requiring official transcripts from students, meaning that we try to verify their completion of a high school credential or another college degree for full admittance into the college. Then, the other measure is we require all of our students to meet with an academic advisor. Now, that can be in-person, or that can be virtual,” said Dr. Abe Dones, Durham Tech’s Vice President and Chief Student Services Officer.
Fighting AI With AI
As scammers increasingly use artificial intelligence to create fake students, schools and federal investigators are now using AI tools to fight back.
“These systems help identify duplicate or suspicious applications,” Dones said. “If a Social Security number is already assigned to a student in our system, it flags it immediately.”
Federal prosecutors told the I-Team that they are actively investigating multiple cases right now.
“There’s one on my colleague’s desk as we speak,” Ellis said. “For anyone who thinks they can take money from the federal government and get away with it – they should know we’re watching.”
What You Can Do
As with most identity theft cases, experts say staying proactive is key:
- Regularly monitor your credit reports
- Watch for unfamiliar student loans or financial aid accounts
- Act immediately if you see anything unusual
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