Criminals Behind $2M School Theft Admit Guilt: Crypto Mining Scheme Uncovered
03 February 2024 - 12:00PM
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In recent developments, two California school district officials
have admitted guilty to stealing up to $1.8 million and
misappropriating electricity to finance and operate a clandestine
crypto-mining operation. The United States Department of
Justice (DOJ) disclosed that Jeffrey Menge, former Assistant
Superintendent and Chief Business Officer of Patterson Joint
Unified School District, and Eric Drabert, the district’s IT
Director, pleaded guilty to charges of theft concerning programs
receiving federal funds. Fraudulent Billing Scandal According
to the DOJ’s statement, Menge, as Assistant Superintendent, hired
Drabert as the school district’s IT director around 2020.
Together, they orchestrated a series of illicit activities to
siphon funds from the district. Menge reportedly utilized a
Nevada-based company called CenCal Tech LLC, which he controlled,
as a front for the crypto scheme. Related Reading: Timeline
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The investigation revealed that to circumvent restrictions on
conducting interested party transactions, Menge created a
fictitious executive, “Frank Barnes,” to represent CenCal
Tech. Through this setup, it is alleged that Menge and
Drabert executed fraudulent transactions worth over $1.2 million,
involving practices such as double billing, overbilling, and
billing for undelivered items. Illicit Crypto Mining Operation
Unveiled Diversifying their criminal activities, Menge and
Drabert went beyond financial embezzlement, according to the US
Department of Justice. The law enforcement agency stated that
the individuals utilized “high-end graphics cards,” school district
property, and electricity to establish and operate a crypto mining
farm within the school district. The illegally mined crypto
assets were then redirected to wallets under their control.
Additionally, Menge is alleged to have exploited school
district-owned vehicles, acquiring a Chevy truck at a discounted
price and selling it for personal profit while using a Ford Transit
van as his vehicle. Related Reading: XRP Records Highest Single Day
Whale Accumulation Since Ripple’s Partial Victory Over SEC The
overall magnitude of the embezzlement was staggering. Menge
misappropriated funds between $1 million and $1.5 million,
while Drabert was found guilty of stealing between $250,000 and
$300,000. The DOJ revealed that the ill-gotten gains were
used for “lavish” personal expenses. Menge indulged in remodeling
his residence, purchasing luxury vehicles, including a Ferrari
sports car, and funding other personal endeavors. Drabert, on the
other hand, utilized stolen funds to renovate his vacation cabin
and for various personal expenses. The guilty pleas by Jeffrey
Menge and Eric Drabert, former officials of Patterson Joint Unified
School District, shed light on a shocking case of embezzlement and
crypto mining fraud within the education system. Featured
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