The U.S. Department of Justice has filed charges against two senior employees of New Jersey’s Paterson Unified School District for allegedly operating a cryptocurrency mining farm.
In a recent statement, the U.S. Department of Justice (DOJ) said that Jeffrey Menzi, former assistant superintendent and chief business officer of the Paterson Unified School District, was the district’s IT director from 2018 to 2022. He claimed that he and Drabbert orchestrated the embezzlement scheme.
Drabbert helped operate a cryptocurrency mining farm using school district property and electricity. Between $1 million and $1.5 million of the mined cryptocurrency was transferred to their personal wallets.
However, the statement did not specify how many schools in the district were involved in cryptocurrency mining activities, even though the district includes 10 schools and serves approximately 6,200 students.
The pair also engaged in additional theft schemes, using CenCal Tech LLC, a Nevada company controlled by Menge, to collect more than 1.2 million yen, including double billing and claims for undelivered goods, according to court filings. It is said that the fraudulent transactions exceeded US dollars.
Menge’s embezzlement totals are said to be between $1 million and $1.5 million, while Drabart’s theft amounted to between $250,000 and $300,000. These ill-gotten gains were used to renovate his home, purchase luxury cars, including a Ferrari, and pay for various personal expenses.
The FBI is leading the investigation, with assistance from the Stanislaus County District Attorney’s Office Investigations Bureau and the Stanislaus County Sheriff’s Office, and Assistant U.S. Attorney Jeffrey A. Spivak is supervising the prosecution, according to the statement.
Sentencing is scheduled for May 30, 2024, before U.S. District Judge Troy L. Nunley, and each defendant faces up to 10 years in prison and a $250,000 fine. .
However, the actual sentence will be determined at the discretion of the court, taking into account legal factors and compliance with federal sentencing guidelines.