School District Officials Sentenced in $1.5 Million Public Education Embezzlement Scheme

A former senior administrator and the former information technology director of a California school district have been sentenced to federal prison after investigators uncovered a multi-year embezzlement operation that diverted public education funds into personal luxury purchases, cryptocurrency mining activity, and fraudulent business transactions.

Federal prosecutors announced that Jeffrey Menge, 45, of Copperopolis, and Eric Drabert, 46, of Modesto were sentenced by a federal court to 30 months and 18 months in prison, respectively, for theft involving programs receiving federal funds.

The case centers on a financial scheme that authorities say siphoned approximately $1.5 million from the Patterson Joint Unified School District, a public education system serving students in California’s Central Valley.

Positions of Authority Exploited

According to court filings, Jeffrey Menge served as Assistant Superintendent and Chief Business Officer for the school district between 2018 and 2022, placing him in a position responsible for overseeing financial operations, budgeting, and procurement decisions.

In 2020, Menge hired Eric Drabert to become the district’s IT Director, granting him operational authority over technology procurement, hardware systems, and network infrastructure across district facilities.

Investigators determined that the two officials used their positions to authorize and process fraudulent transactions through a company secretly controlled by Menge.

Shell Company Used to Conceal Fraud

Court records show that the embezzlement scheme relied heavily on a Nevada-based entity called CenCal Tech LLC, which prosecutors say was created and controlled by Menge.

Because district policy prohibited officials from conducting business with companies in which they had a financial interest, Menge allegedly constructed a false corporate structure to conceal his involvement.

To obscure ownership, investigators say he created a fictional corporate executive named “Frank Barnes”, who appeared in company documentation and communications to make the business appear independent.

Through CenCal Tech, prosecutors allege the defendants carried out fraudulent billing operations that included:

• Double billing for equipment and services
• Inflated pricing for technology purchases
• Invoices for equipment that was never delivered

These transactions allowed funds from the school district to be redirected into accounts connected to the defendants.

Unauthorized Cryptocurrency Mining Operation

Investigators also uncovered a separate scheme involving the misuse of school district resources to generate cryptocurrency.

According to court filings, the defendants purchased high-performance graphics processing units (GPUs) and installed them within district facilities to create an unauthorized cryptocurrency mining operation.

Cryptocurrency mining relies on computer hardware performing complex calculations that validate blockchain transactions. The process consumes substantial electrical power and hardware resources.

Prosecutors allege the mining operation used:

• School-owned computing equipment
• District electrical power
• District facilities and network infrastructure

The cryptocurrency generated through the mining process was allegedly transferred into personal digital wallets controlled by the defendants.

Unauthorized mining operations have become a growing concern in public institutions and corporate environments because of their ability to consume large amounts of electricity while remaining difficult to detect within complex IT systems.

Misuse of Public Property

Authorities also identified several additional methods used to divert district assets.

Investigators found that Menge misused vehicles owned by the school district. In one instance, he allegedly purchased a Chevrolet truck from the district at a below-market price before reselling it for profit.

He also reportedly used a Ford Transit van owned by the school district as a personal vehicle, despite the vehicle being designated for official district operations.

Personal Spending from Stolen Funds

Financial tracing conducted during the investigation showed that stolen funds were used to support a number of personal expenditures.

According to prosecutors, Jeffrey Menge used the money to remodel his residence and purchase high-value luxury vehicles, including:

• Ferrari 458 sports car
• Audi R8
• Chevrolet Corvette Z06

Eric Drabert used a portion of the funds to finance renovations at a vacation cabin, along with other personal expenses.

In total, investigators determined that Menge was responsible for approximately $1.5 million in losses, while Drabert was responsible for approximately $276,000 in misappropriated funds.

Federal Investigation and Prosecution

The investigation was conducted by federal authorities with support from regional law enforcement agencies responsible for financial crime investigations.

Federal prosecutors handled the case under statutes that criminalize theft involving programs receiving federal funding. School districts often receive federal education funds through programs designed to support student services, infrastructure improvements, and educational resources.

When individuals entrusted with administering those funds divert them for personal use, the conduct can fall under federal jurisdiction.

The case highlights the financial oversight challenges facing public institutions that manage large procurement budgets and technology infrastructure.

Fraud schemes involving procurement manipulation, shell companies, and internal billing systems remain a persistent threat in both government and private sector environments.

Sentencing Outcome

Following their convictions, the court imposed prison sentences reflecting each defendant’s level of involvement in the scheme.

Federal sentencing also allows for additional financial penalties, restitution orders, and asset recovery measures aimed at reimbursing victims for financial losses.

Cases involving theft of public education funds are typically prosecuted aggressively because the resources involved are intended to support educational programs and services for students.

The investigation remains an example of how financial auditing, digital forensic analysis, and coordinated law enforcement work can uncover long-running internal fraud schemes within public institutions.

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