In recent developments, two California school district employees have pleaded guilty to stealing up to $1.8 million and diverting electricity to finance and operate a secret cryptocurrency mining operation.
The U.S. Department of Justice (DOJ) has accused Jeffrey Menzi, a former assistant superintendent and chief operating officer of the Paterson Unified School District, and Eric Drabat, the district's IT director, of a federally funded program. It was announced that he had pleaded guilty to a charge of theft.
Fraudulent billing case
According to the Department of Justice statementMenge hired Drabbert as the district's IT director around 2020 while serving as assistant superintendent.
Together they organized a series of projects. illegal act To siphon funds from the district. Menge reportedly used a Nevada-based company he owned called CenCal Tech LLC as a front for the encryption scheme.
After researching, we found that to avoid: limit Mr. Menge created a fictitious executive, “Frank Barnes,'' to represent CenCal Tech in conducting transactions between interested parties.
Through this setup, Menge and Dravert allegedly executed more than $1.2 million worth of fraudulent transactions, including: double billingovercharging, and billing for undelivered items.
Illegal cryptocurrency mining activity revealed
diversify criminal actAccording to the U.S. Department of Justice, Menge and Dravert went beyond financial embezzlement.
Law enforcement said the individuals established and operated a cryptocurrency mining farm within the school district using “high-end graphics cards,” school district property, and electricity.
The illegally mined crypto assets were then redirected to wallets under their control. Additionally, Menge allegedly misused school district-owned vehicles to obtain a Chevy truck at a discount and sell a Ford Transit van for personal gain while using it as a vehicle.
The overall scale of the embezzlement was staggering.Menge appropriated funds between Drabart was found guilty of stealing between $250,000 and $300,000, between $1 million and $1.5 million.
The Justice Department said the ill-gotten gains were used for “extravagant” personal expenses. Menge indulged in renovating his home, buying luxury cars, including a Ferrari sports car, and financing other personal activities. Meanwhile, Drabbert used his stolen funds to renovate the villa and pay for various personal expenses.
The guilty pleas of former Paterson Unified School District employees Jeffrey Menzi and Eric Drabbert shed light on a shocking case of embezzlement and cryptocurrency mining fraud within the education system.
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