California School Officials Sentenced to Prison Following Massive Embezzlement Scheme and Unauthorized Cryptocurrency Mining Farm

California school administrators sentenced after using district funds for luxury cars and a secret crypto mining farm. FBI recovers $1.5 million in stolen assets.

By: AXL Media

Published: Mar 4, 2026, 8:40 AM EST

Source: The information in this article was sourced from U.S. Attorney's Office, Eastern District of California

A Systematic Breach of Public Trust in California Schools

The integrity of the Patterson Joint Unified School District was severely compromised over a four year period as two high ranking officials executed a sophisticated embezzlement operation. Jeffrey Menge, the former assistant superintendent and chief business officer, and Eric Drabert, the former IT director, were sentenced to 30 months and 18 months in prison respectively for their roles in the theft of federal funds. According to U.S. Attorney Eric Grant, the defendants were entrusted with resources designed to support and educate children, but they instead diverted approximately $1.5 million for their own personal enrichment. The sentencing marks the conclusion of an investigation that exposed how deep seated administrative power can be manipulated to bypass standard fiscal oversight.

Fictitious Entities and Fraudulent Billing Operations

The core of the conspiracy involved the creation of CenCal Tech LLC, a Nevada based company controlled by Menge. To circumvent conflict of interest policies, Menge invented a fictitious executive named Frank Barnes to act as the face of the firm. Through this shell company, Menge and Drabert engaged in a series of fraudulent transactions with the school district that included double billing, overcharging for services, and submitting invoices for equipment that was never actually delivered. FBI Special Agent in Charge Sid Patel noted that these funds, which should have been an investment in the community's students, were instead used to line the pockets of those hired to serve them.

High Tech Exploitation Through Illegal Cryptocurrency Mining

In a unique and technical layer of the fraud, the defendants utilized their authority over the district's technological infrastructure to establish an unauthorized cryptocurrency mining farm. Menge and Drabert purchased high end graphics cards using district money and used school property and electricity to power the mining operation. The cryptocurrency generated by this farm was then transferred into personal digital wallets under their direct control. This exploitation of public utilities and hardware represented a direct theft of district resources that went beyond simple financial ledger manipulation, turning the educational environment into a private profit center.