California School Officials Admit Guilt in $1.8 Million Crypto-Mining Scam
In recent developments, two California school district officials have admitted guilt in a case involving the theft of up to $1.8 million and the misappropriation of electricity to fund a secret cryptocurrency mining operation.
Fraudulent Billing Scandal
The United States Department of Justice (DOJ) revealed that Jeffrey Menge, former Assistant Superintendent, and Eric Drabert, the district’s IT Director, pleaded guilty to charges related to theft concerning programs receiving federal funds. Menge hired Drabert as the IT director for the school district.
Together, they devised a plan to divert funds from the district. Menge used his company, CenCal Tech LLC, based in Nevada, as a front for their crypto scheme.
To bypass restrictions on interested party transactions, Menge created a fictitious executive named “Frank Barnes” to represent CenCal Tech. They engaged in fraudulent transactions worth over $1.2 million by employing tactics such as double billing and overbilling.
Illicit Crypto Mining Operation Unveiled
Menge and Drabert expanded their criminal activities beyond financial embezzlement. The DOJ stated that they utilized high-end graphics cards, school district property, and electricity to establish and run a crypto mining farm within the school district. The illegally mined cryptocurrencies were then redirected to wallets under their control.
Menge also took advantage of school district-owned vehicles for personal profit by acquiring a discounted Chevy truck and selling it while using a Ford Transit van as his own vehicle.
The embezzlement amounted to between $1 million and $1.5 million for Menge and between $250,000 and $300,000 for Drabert. The ill-gotten gains were used for personal expenses, including home renovations, luxury vehicle purchases, and funding personal endeavors.
Hot Take: Education System Shaken by Embezzlement and Crypto Mining Fraud
The guilty pleas of former officials Jeffrey Menge and Eric Drabert from Patterson Joint Unified School District have exposed a shocking case of embezzlement and crypto mining fraud within the education system.
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