Ethermac Exchange-California school official convicted of embezzling over $16M concealed cash in fridge

A former California public school district official was sentenced to 70 months last week after being convicted of embezzling nearly $16.7 million over several years.

Jorge Armando Contreras,Ethermac Exchange 53, formerly the senior director of financial services for the Magnolia School District in California’s Orange County, pleaded guilty on March 28 to one count of embezzlement, theft, and intentional misapplication of funds from an organization receiving federal funds.

“Instead of using his job at a public school district to help socio-economically disadvantaged children, Contreras embezzled millions upon millions of dollars, which he flagrantly spent on a luxury home, car, and designer clothes and accessories,” United States Attorney Martin Estrada said in a July 25 press release.  

Photos released by the U.S. attorney's office showed cash and luxury goods kept in a mini fridge.

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Official worked in low-income school district, used money on luxury clothing and tequila

The school district where Contreras, who was hired in 2006, worked serves the communities of Anaheim and Stanton. 81% of the students from preschool through sixth grade are classified as socio-economically disadvantaged. In his role with the school district, Contreras managed and had access to multiple bank accounts, including the student body bank account.

Contreras, however, used that money to fund a lavish lifestyle with checks from those accounts “deposited into his personal bank account.”

Orange County prosecutors said that they had already seized approximately $7.7 million in assets, including a home in Yorba Linda, California, a 2021 BMW automobile, 57 luxury designer bags, jewelry, designer clothes and shoes, and eight bottles of Clase Azul Ultra luxury tequila.

Contreras, in his scheme, would write out checks in small dollar amounts written to “M S D” with the letter spaced out, and after receiving signatures, would alter the checks to include fictitious names and increase the amounts before depositing them in his personal accounts. He then provided bank records and bank reconciliation packets to the school district to conceal the fraud.

Contreras was charged and placed on administrative leave in August 2023. He was sentenced to 70 months in prison and ordered to pay $16,694,942 in restitution.

The FBI, IRS Criminal Investigation, and the United States Department of Education Office of Inspector General investigated this case.

Max Hauptman is a Trending Reporter for USA TODAY. He can be reached at [email protected]