Date: July 25, 2024 Contact: newsroom@ci.irs.gov The former senior director of fiscal services at an Orange County public school district was sentenced today to 70 months in federal prison for embezzling nearly $16.7 million from the district over several years. Jorge Armando Contreras, of Yorba Linda, was sentenced by United States District Judge Fred W. Slaughter, who also ordered him to pay $16,694,942 in restitution. Contreras 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,” said United States Attorney Martin Estrada. “Today’s sentence highlights my office’s determination to prosecute and punish those who betray the public trust – especially when their behavior affects some of our community’s most vulnerable members.” Contreras was the senior director of fiscal services at Magnolia School District, which serves students in Anaheim and Stanton. In this role, Contreras, whom the school district hired in 2006, managed the district’s fiscal operations. The schools in this district educate children from preschool through sixth grade – 81% of whom are classified as socio-economically disadvantaged. He managed and had access to various school district bank accounts as well as the student body bank account. He caused checks from these accounts to be deposited into his personal bank account. Contreras wrote checks in small dollar amounts written to “M S D,” with the letters spaced out, and, after receiving the proper signatures from others, would include fictitious names and increase the amounts of the checks and deposit the checks into his personal bank account via ATMs. To conceal his fraud, Contreras provided bank reconciliation packets to others at the school district with falsified bank statements and records. In total, Contreras embezzled approximately $16,694,942 from the school district. The school district placed Contreras on administrative leave in August 2023 and filed a lawsuit against him in Orange County Superior Court. Law enforcement so far has seized approximately $7.7 million in personal and real property traced to the scheme, including a home in Yorba Linda, a 2021 BMW automobile, 57 luxury designer bags (mostly Louis Vuitton), various pieces of jewelry, designer clothes and shoes, and eight bottles of Clase Azul Ultra luxury tequila. IRS Criminal Investigation, the FBI, and the United States Department of Education Office of Inspector General investigated this case. Assistant United States Attorneys Billy Joe McLain of the Public Corruption and Civil Rights Section, Brett A. Sagel of the Corporate and Securities Fraud Strike Force, and James E. Dochterman of the Asset Forfeiture and Recovery Section prosecuted this case.
