DOJ charges duo for crypto mining in school district, amid US energy scrutiny

The charges against the school district staff members coincide with the U.S. energy regulator’s recent clampdown on crypto mining activities.

The United States Department of Justice (DoJ) has charged two senior staff members of the Patterson Joint Unified School District for allegedly operating a crypto mining operation on the premises of the district’s ten schools, utilizing school resources and running up the electricity costs.

In a recent statement, the DoJ claimed that Jeffrey Menge, assistant superintendent, and chief business officer of Patterson Joint Unified School District, along with Eric Drabert, IT director for the school district, worked together to operate a crypto mining farm and transferred all the crypto into their own crypto wallets thereafter.

“They purchased high-end graphics cards and used those cards, together with other school district property and electricity, to operate a cryptocurrency mining” farm at the school district.”

However, the statement did not provide clarity on how many schools in the district were used for the crypto mining operation, which comprises 10 schools serving about 6,200 students. Additionally, the type of crypto mined was not disclosed.

Some of the most commonly mined cryptos include Bitcoin (BTC), Monero (XMR), Ravencoin (RVN), and Dogecoin (DOGE).

According to recent data from CoinGecko, mining a single Bitcoin as a solo miner requires about 266,000 kilowatt-hours. This would take approximately seven years, requiring a monthly electricity consumption of 143 kWh.

Along with other alleged fraudulent activity, the DoJ claime that Menge embezzled a total between $1 million and $1.5 million and Drabert stole between $250,000 and $300,000 during the scheme.

This comes after the U.S. energy regulator’s recent crackdown on crypto miners as part of an initiative to decrease energy waste in the nation.

On Feb. 1, the United States Department of Energy (DOE) declared that crypto miners must report their energy consumption for the upcoming six months. This move follows concerns about the recent surge in Bitcoin prices, leading to an influx of crypto mining activities.

Related: Bitcoin mining firm Core Scientific mined $812M worth of BTC in 2023

Just a day before this, the U.S. Energy Information Administration (EIA) said it will be releasing a survey to measure the electricity usage of local crypto mining companies starting next week, with miners “required to respond with details related to their energy use.”

This is not just a concern within the U.S, regulators worldwide are making efforts to control excessive electricity consumption.

In December 2023, Cointelegraph reported that Indonesian police authorities closed down 10 Bitcoin mining operations, accusing the organizers of electricity theft amounting to nearly $1 million.