- Department of Justice charged two employees of a California school district with stealing public resources to operate an illegal crypto mining operation
- The assistant superintendent and IT director allegedly used district computers and electricity to mine cryptocurrency and pocketed over $1 million in profits
- Charges come amid increased U.S. scrutiny on crypto mining’s energy usage, with new reporting requirements for miners and shutdowns of alleged electricity theft overseas
The United States Department of Justice (DOJ) has filed charges against two senior staff members of a California school district for allegedly operating a crypto mining farm on school premises and pocketing the profits. The accusations come amid a federal crackdown on energy usage for crypto mining.
Details of the Alleged Crypto Mining Operation
According to the DOJ, Jeffrey Menge, assistant superintendent and chief business officer of Patterson Joint Unified School District, worked with Eric Drabert, the district’s IT director, to mine cryptocurrency using school resources.
The two allegedly purchased high-end graphics cards and used them together with other school district property and electricity to run crypto mining rigs across the district’s 10 schools. The statement did not specify which cryptocurrencies were being mined.
Profits from the mining operation were pocketed by Menge and Drabert, with Menge accused of stealing between $1 million and $15 million and Drabert accused of stealing between $250,000 and $300,000.
The Crackdown on Crypto’s Energy Use
The charges come as U.S. regulators increase scrutiny on the energy usage of crypto mining.
Earlier this month, the Department of Energy declared that crypto miners must report their energy consumption over the next six months amid concerns over a spike in mining following Bitcoin’s price increase.
The Energy Information Administration also recently announced it will survey local crypto mining companies on their electricity usage.
Regulators worldwide are looking at ways to curb excessive energy consumption for crypto mining. Police in Indonesia shut down 10 mining operations in December over alleged electricity theft totaling nearly $1 million.
