A former senior Orange County education official pleaded guilty on Thursday, March 28, to embezzling more than $15 million in public school funds over a seven-year span.
Jorge Armando Contreras, 52, pleaded guilty to embezzling from the Magnolia School District — which serves students in Anaheim and Stanton — from August 2016 through July of last year, according to a U.S. Attorney’s Office statement. He also pleaded guilty to charges of theft and intentional misapplication of funds from an organization receiving federal funds, a felony that carries a statutory maximum sentence of 10 years in prison.
Contreras, a Yorba Linda resident, started working for the school district in July 2006 and became director of fiscal services in March of 2013.
He was promoted to senior director of fiscal services in April 2017, when he began to manage and have access to various school district bank accounts as well as the student body bank account, officials said. The U.S. Attorney’s Office noted that 81% of the children educated by the Magnolia School District are classified as socio-economically disadvantaged, and that the school receives millions of dollars annually in federal funds.
Contreras caused checks from these accounts to be deposited into his personal bank account, according to prosecutors. Contreras would include fictitious names on the checks and increase the amounts of the checks and deposit the them into his personal bank account via ATMs.
He then provided bank reconciliation packets to others at the school district with falsified bank statements and records to conceal his fraud.
Prosecutors said that from August 2022 to July 2023 alone, Contreras embezzled more than $4 million, using around $1.9 million to pay American Express charges, to withdraw $325,000 in cash from ATMs, to transfer more than $130,000 to a person he would later marry and to purchase a BMW SUV.
He was placed on administrative leave in August.
Law enforcement so far has seized around $7.7 million in property traced to the scheme, including a home in Yorba Linda, a 2021 BMW automobile, 57 luxury designer bags, jewelry, designer clothes and shoes, and eight bottles of Clase Azul Ultra luxury tequila, according to the U.S. Attorney’s Office. .
In total, Contreras admitted to embezzling approximately $15,920,042 from the school district.
Contreras, who is free on a $450,000 bond, is set to appear back in court on July 25 for a sentencing hearing.
