School officials busted for hidden crypto mining operation

The United States Department of Justice (DoJ) has filed charges against two senior staff members of the Patterson Joint Unified School District, accusing them of operating a cryptocurrency mining operation within the premises of the district’s ten schools. 

Jeffrey Menge, the assistant superintendent and chief business officer, and Eric Drabert, the IT director, allegedly utilized school resources and increased electricity costs to mine cryptocurrency and transferred the proceeds to their crypto wallets.

Crypto mining operation unveiled

The DoJ alleges that Menge and Drabert purchased high-end graphics cards and employed them and other school district property and electricity to establish and maintain a cryptocurrency mining farm on school grounds. The specific number of schools involved in this operation has not been disclosed, though the district serves approximately 6,200 students across its ten schools.

The nature of the cryptocurrency mined in this operation remains undisclosed. However, some of the commonly mined cryptocurrencies include Bitcoin (BTC), Monero (XMR), Ravencoin (RVN), and Dogecoin (DOGE).

Cryptocurrency mining, particularly Bitcoin, is renowned for its significant energy consumption. According to recent data from CoinGecko, mining a single Bitcoin as a solo miner requires approximately 266,000 kilowatt-hours, equivalent to seven years of continuous electricity consumption at 143 kWh per month. The alleged crypto mining operation’s substantial electricity use has drawn attention and concern from authorities.

Embezzlement and fraud allegations

In addition to the crypto mining operation, the DoJ alleges that Menge embezzled between $1 million and $1.5 million. Drabert is accused of stealing between $250,000 and $300,000 during this scheme. These allegations compound the legal troubles facing the two senior staff members.

This case comes amidst a broader crackdown on cryptocurrency miners in the United States. On February 1, the United States Department of Energy (DOE) mandated that crypto miners report their energy consumption for six months. This initiative addresses concerns about the increasing energy consumption associated with the surge in Bitcoin prices, which has led to a proliferation of crypto mining activities.

Furthermore, the U.S. Energy Information Administration (EIA) has announced plans to launch a survey to measure the electricity usage of local crypto-mining companies. This survey will require miners to provide detailed information about their energy consumption, marking a significant step toward monitoring and regulating energy-intensive crypto-mining operations.

It’s not just the United States; regulators worldwide are ceasing their efforts to control excessive electricity consumption from cryptocurrency mining. This concern arises from the environmental impact and strain on energy resources associated with the cryptocurrency industry’s rapid growth.