Orange County school official sentenced for embezzling over $16.6 million from district

A federal judge sentenced a former Orange County school employee to nearly six years in prison for embezzling nearly $16.7 million from the district.

According to the U.S. Department of Justice, 53-year-old Jorge Armando Contreras embezzled the money over a seven-year period. He was arrested in October 2023 for suspicion of felony embezzlement concerning programs receiving federal funds.

On March 28, he pleaded guilty 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.

The Yorba Linda resident served as the Magnolia School District's senior director of fiscal services, managing the district's finances since his hire in 2006. The district predominantly serves socio-economically disadvantaged children and has received millions of dollars in federal funds annually for the past 14 years.

Prosecutors allege Contreras made more than 250 unauthorized payments to himself from 2016 to July 2023. Each check ranged from $11,000 to as high as $95,000. He used a fake name on the checks, but the money was deposited into his personal bank account, according to a criminal complaint .

The Department of Justice said he wrote checks in small dollar amounts written to "M S D," with the letters spaced out. After getting the necessary signatures, he would increase the amount of the checks before depositing them into his account.

In total, Contreras embezzled $16,694,942 from the school district. Law enforcement seized about $7.7 million in personal and real property, which includes a home a Yorba Linda, 2021 BMW, 57 luxury designer bags, various pieces of jewelry, designer clothes and shoes and fight bottles of Clase Azul Ultra luxury tequila.