In recent developments, two California school district officials pleaded guilty to stealing up to $1.8 million and embezzling electricity to fund and operate a secret cryptocurrency mining operation.
The U.S. Department of Justice (DOJ) revealed that Jeffrey Ming, former assistant superintendent and chief business officer of the Paterson Unified School District, and Eric Drabert, the district's IT director, have pleaded guilty to theft charges related to software that receives federal funds.
Fraudulent billing scandal
According to the Ministry of Justice statementMenge, as assistant superintendent, hired Drabert as the school district's IT director around 2020.
Together they organized a series of Illegal activities To withdraw money from the area. Menge reportedly used a Nevada-based company called CenCal Tech LLC, which he controlled, as a front for the cryptocurrency scheme.
Investigations revealed that this was a fraud Restrictions When conducting transactions with interested parties, Menge created a fictitious CEO, “Frank Barnes,” to represent CenCal Tech.
Through this setup, Menge and Drabert allegedly executed more than $1.2 million worth of fraudulent transactions, involving practices such as Double billingOver-invoicing and billing for undelivered items.
Detecting illegal cryptocurrency mining
Diversify it Criminal activitiesMenge and Drabert went beyond financial embezzlement, according to the US Department of Justice.
The law enforcement agency stated that the individuals used “high-end graphics cards,” school district property, and electricity to set up and operate a cryptocurrency mining farm within the school district.
The illegally extracted crypto assets were then redirected to wallets under their control. Additionally, Menge allegedly exploited school district-owned vehicles, obtaining a Chevy truck at a discount and selling it for a personal profit while using a Ford Transit truck as his vehicle.
The total scale of the embezzlement was staggering. Save me Embezzlement Money between $1 million and $1.5 million, while Drabert was convicted of stealing between $250,000 and $300,000.
The Ministry of Justice revealed that the ill-gotten gains were used to cover “exorbitant” personal expenses. Menji immersed himself in remodeling his residence, purchasing luxury cars, including a Ferrari sports car, and financing other personal endeavors. On the other hand, Drabert used the stolen money to renovate his vacation cabin and to cover various personal expenses.
The admission of Jeffrey Ming and Eric Drabert, former administrators of the Paterson Unified School District, has highlighted a horrific case of cryptocurrency mining embezzlement and fraud within the educational system.
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