Former Orange County school official arrested for allegedly embezzling $14 million from district

Federal authorities arrested a former Orange County school district employee Thursday after he allegedly embezzled $14 million to pay off his house and purchase luxury goods and services, including items from Versace and Louis Vuitton. 

According to the U.S. Department of Justice, 52-year-old Jorge Armando Contreras embezzled the money over a seven-year period. He was arrested Thursday on suspicion of felony embezzlement concerning programs receiving federal funds and is now facing up to 10 years in prison. 

The Yorba Linda resident served as the Magnolia School District's senior director of fiscal services, managing the district's finances since his hire in 2006. The district predominantly serves socio-economically disadvantaged children and has received millions of dollars in federal funds annually for the past 14 years. 

Prosecutors allege Contreras made more than 250 unauthorized payments to himself from 2016 to July 2023. Each of these checks ranged from $11,000 to as high as $95,000. He used a fake name on the checks but the money was deposited into his personal bank account, according to a criminal complaint. 

From August 2022 to July 2023, he allegedly embezzled $4.1 million from the Magnolia School District. He used this money to pay $1.9 million to American Express, withdrew $325,000 in cash and bought a house for more than $1.5 million, according to the DOJ.

He also allegedly bought a BMW SUV worth about $127,000 and transferred $130,000 to his partner, whom he married in 2023.

Prosecutors also claimed he used the embezzled funds to buy items from Versace and Louis Vuitton, as well as for cosmetic treatments. 

He's being held without bond and is expected to appear in court on Nov. 27.