The United States Department of Justice (DOJ) has filed charges against two high-ranking staff members of the Patterson Joint Unified School District accused of orchestrating a cryptocurrency mining operation within the district’s premises, siphoning resources, and inflating electricity costs.
Documents reveal a complex scheme orchestrated by Menge, who served as the Assistant Superintendent and Chief Business Officer, and Drabert, hired as the IT Director in 2020. The duo allegedly embezzled over $1.2 million through CenCal Tech LLC, a company controlled by Menge. The fraudulent transactions included double billing, overbilling, and billing for undelivered items.
Menge and Drabert reportedly misappropriated school property and electricity to operate a cryptocurrency mining farm within the district, stealing between $1 million and $1.5 million and $250,000 to $300,000, respectively. The mined cryptocurrency was then transferred to their personal wallets.
Both individuals used the stolen funds for personal luxuries, including home renovations, high-end cars, and vacation cabin remodeling. They also engaged in unauthorized use of school-owned vehicles. However, Menge and Drabert face a maximum statutory penalty of 10 years in prison and a $250,000 fine.
DOE Crypto Mining Probe
Meanwhile, the U.S. Department of Energy (DOE) has initiated a comprehensive review of Bitcoin mining. Under the DOE, the Energy Information Administration (EIA) will scrutinize the electricity usage of selected U.S.-based miners over the next six months. This move termed an “emergency collection of data request,” raises concerns about potential adverse policies in the crypto community.
The EIA asserts its policy-neutral stance but acknowledges that the collected data may influence decisions regarding the crypto industry in the coming months. The agency justifies this urgency by citing the recent surge in crypto prices, emphasizing the potential public harm resulting from increased electricity consumption.
As the EIA seeks insights into the impact of crypto mining on public infrastructure, questions arise about the broader implications for the digital currency industry. The survey, affecting 82 firms operating around 150 facilities nationwide, raises speculation about the government’s stance on the societal benefits of digital currencies.
The EIA points to past instances, such as the 2018 cold snap in Plattsburg, to underscore potential risks associated with crypto mining. Nevertheless, states like New York and Texas have taken measures to regulate and control digital currency mining activities within their jurisdictions, reflecting a broader trend in addressing environmental and economic concerns associated with the energy-intensive sector.
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