Former School District Official Sentenced to Over Five Years for Embezzling $16.7 Million
Jorge Armando Contreras, 53, a former senior director of fiscal services at the Magnolia School District, has been sentenced to 70 months in federal prison for embezzling nearly $16.7 million from the district. Contreras, who managed the district's fiscal operations, used his position to fund a lavish lifestyle, hiding stacks of cash in a small refrigerator.
Lavish Lifestyle Funded by Stolen School District Funds
Contreras, who began his employment with the district in 2006, oversaw the finances of a district where 81% of students are socio-economically disadvantaged. Instead of directing funds to benefit these schools, he diverted them for personal use, including purchasing luxury items like Louis Vuitton designer bags, a luxury car, and a home.
Embezzlement Scheme and Concealment
In his role, Contreras had access to various school district bank accounts. He orchestrated his scheme by writing checks in small amounts to “M S D” and later altering them to spell fictitious names and increase the check amounts. He then deposited these checks into his personal bank account and provided falsified bank statements and records to conceal his theft.
Legal Consequences and Restitution
Contreras pleaded guilty in March to one count of embezzlement, theft, and intentional misapplication of funds from an organization receiving federal funds. He was sentenced in a Santa Ana court and ordered to pay $16,694,942 in restitution. Following his arrest, law enforcement seized approximately $7.7 million in personal and real property, including a home, a 2021 BMW, luxury bags, jewelry, designer clothes, shoes, and bottles of luxury tequila.
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Investigation and Prosecution
The FBI, IRS Criminal Investigation, and the U.S. Department of Education Office of the Inspector General conducted the investigation. The U.S. Attorney’s Office for the Central District of California handled the prosecution. Contreras was placed on administrative leave in August 2023, and the district subsequently filed a lawsuit in Orange County Superior Court.
Photos released by the prosecutor’s office highlighted the extent of Contreras' deception, showing a mini fridge stuffed with cash and Louis Vuitton purses filled with money. NBC News has reached out to Contreras' attorney for comment.
This case serves as a reminder of the importance of vigilance and thorough financial oversight in protecting public funds from misuse.
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