Skip to content

DOJ Charges School District Staff for Unauthorized Crypto Mining Operation

Two staff members of a U.S. school district are charged for running a crypto mining operation within school premises, using school resources and incurring high electricity costs.

The United States Department of Justice (DoJ) has pressed charges against two senior staff members of the Patterson Joint Unified School District for allegedly operating a cryptocurrency mining operation within the district's ten schools. The individuals are accused of utilizing school resources and incurring substantial electricity costs.

According to the DoJ, Jeffrey Menge, the assistant superintendent and chief business officer of the Patterson Joint Unified School District, and Eric Drabert, the IT director for the school district, collaborated to establish a cryptocurrency mining farm on the school premises. Subsequently, they transferred all mined cryptocurrency into their personal crypto wallets.

The two individuals allegedly purchased high-end graphics cards and employed other school district property and electricity to operate the crypto mining farm. However, the statement did not specify how many schools within the district were involved in the operation. The district comprises ten schools serving approximately 6,200 students. Additionally, the type of cryptocurrency mined was not disclosed.

Among the most commonly mined cryptocurrencies are Bitcoin, Monero, Ravencoin (RVN), and Dogecoin. To provide context, mining a single Bitcoin as a solo miner requires approximately 266,000 kilowatt-hours, equivalent to seven years of continuous mining with a monthly electricity consumption of 143 kWh.

Apart from the alleged crypto mining activities, the DoJ claims that Menge embezzled between $1 million and $1.5 million, while Drabert stole between $250,000 and $300,000 during the scheme.

This development coincides with the U.S. energy regulator's recent crackdown on cryptocurrency miners as part of an effort to reduce energy wastage across the nation. On February 1, the United States Department of Energy (DOE) mandated that crypto miners must report their energy consumption for the next six months. This move follows concerns regarding the surge in Bitcoin prices, leading to a proliferation of crypto mining activities.

Additionally, the U.S. Energy Information Administration (EIA) announced that it would be launching a survey to measure the electricity usage of local crypto mining companies. Miners are obligated to respond with details related to their energy usage.

This heightened scrutiny of crypto mining's energy consumption is not exclusive to the United States, as regulators worldwide are taking measures to control excessive electricity usage. In December 2023, Indonesian police authorities shut down ten Bitcoin mining operations, accusing the organizers of electricity theft amounting to nearly $1 million.