SANTA ANA, California � The former senior director of fiscal services at
an Orange County public school district was arrested today on a federal
criminal complaint alleging he embezzled more than $14 million from the
district over a seven-year period and used the illicitly obtained funds to
finance a house, buy luxury items, and obtain cosmetic treatment from a
dermatologist.

Jorge Armando Contreras, 52, of Yorba Linda, is charged with embezzlement
concerning programs receiving federal funds, a felony punishable by up to
10 years in federal prison. He made his initial appearance this afternoon
in United States District Court in Santa Ana and a federal magistrate
judge ordered him jailed without bond. Contreras� arraignment is scheduled
for November 27.

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. Each year, since 2009, Magnolia School
District has received millions of dollars in federal funds.

According to an affidavit filed with the complaint last week and unsealed
today, from August 2016 to July 2023, Contreras embezzled more than $14
million from Magnolia School District by making unauthorized payments to
himself from district funds � payments that came from more than 250 checks
from the district that were deposited into Contreras� personal bank
account. The checks ranged from approximately $11,000 to approximately
$95,000 and listed fictitious persons as the payee, the affidavit alleges.

From August 2022 to July 2023 alone, Contreras allegedly embezzled more
than $4.1 million from Magnolia School District. During this time,
Contreras used the embezzled funds to pay more than $1.9 million to
American Express, withdraw $325,000 in cash from ATMs, and transfer more
than $130,000 to his partner, whom he married in August 2023. Contreras
allegedly also used the illicitly obtained funds to purchase his residence
in Yorba Linda for approximately $1.5 million as well as a BMW SUV for
approximately $127,000, which he used to deposit embezzled funds into his
personal bank account via drive-thru ATMs.

Contreras purchased the Yorba Linda residence in 2020 and paid for more
than $1 million of it via a wire transfer from his personal bank account.
Contreras also allegedly altered bank statements submitted as part of the
loan application for this property to hide funds he embezzled from the
school district.

The affidavit further alleges that Contreras altered documents over the
years to hide his embezzlement, and that he used some of the funds to pay
$190,000 to a West Hollywood dermatologist and surgeon for cosmetic
treatments. He also allegedly used the embezzled funds to purchase luxury
items sold by Versace and Louis Vuitton.

Contreras allegedly also transferred some of the embezzled funds to bank
accounts in Mexico.

The school district placed Contreras on administrative leave in August
2023 and has filed a lawsuit against him in Orange County Superior Court.

A criminal complaint contains allegations. All defendants are presumed
innocent until proven guilty beyond a reasonable doubt in a court of law.

The FBI, IRS Criminal Investigation, and the United States Department of
Education � Office of Inspector General are investigating 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 are prosecuting this case.

Contact
Ciaran McEvoy
Public Information Officer
ciaran.mcevoy@usdoj.gov
(213) 894-4465

https://www.justice.gov/usao-cdca/pr/former-orange-county-education-
official-arrested-complaint-alleging-he-embezzled-more