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In recent developments, two California school district officials have pleaded guilty to stealing up to $1.8 million and abusing power to finance and operate a secret crypto-mining operation.
The United States Department of Justice (DOJ) revealed that Paterson Joint Unified School District’s former assistant superintendent and chief business officer Jeffrey Menz and the district’s IT director Eric Drebert pleaded guilty to theft charges related to programs that receive federal funds. .
fraudulent billing scam
According to the DOJ statement, Mainz hired Drebert as the school district’s IT director around 2020, while serving as assistant superintendent.
Together, they carried out a number of illegal activities to extort money from the district. Mainz allegedly used a Nevada-based company called Cencal Tech LLC, which he controlled, as a front for the crypto scheme.
The investigation revealed that to avoid restrictions on conducting interested party transactions, Mainz created a fictitious executive, “Frank Barnes”, to represent Cencal Tech.
Through this setup, it is alleged that Menge and Drebert conducted fraudulent transactions totaling more than $1.2 million, which included practices such as double billing, overbilling, and billing for undelivered items.
Illegal crypto mining operation unveiled
Diversifying their criminal activities, Mainz and Drebert also went beyond financial embezzlement, according to the U.S. Department of Justice.
The law enforcement agency said the individuals used “high-end graphics cards,” school district property and electricity to set up and operate a crypto mining farm within the school district.
The illegally mined crypto assets were then redirected to wallets under their control. Additionally, Mainz is accused of exploiting school district-owned vehicles, obtaining a Chevy truck at a discounted price and selling it for personal gain while using a Ford Transit van as his vehicle.
The total scale of embezzlement was staggering. Mainz misappropriated between $1 million and $1.5 million, while Drebert was found guilty of theft of between $250,000 and $300,000.
The DOJ revealed that ill-gotten gains were used to fund “lavish” personal expenses. Mainz participated in remodeling his residence, purchasing luxury vehicles including a Ferrari sports car, and financing other personal endeavors. Drebert, on the other hand, used the stolen money to renovate his vacation cabin and for various personal expenses.
The guilty pleas of former Paterson Joint Unified School District officials Jeffrey Menz and Eric Drebert shed light on a shocking case of embezzlement and crypto mining fraud within the education system.
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