Add The California Post on Google A new report revealing the staggering extent of fraud in America’s K-12 education system highlights a pair of California school leaders who separately stole nearly $20 million from their schools to bankroll their lavish lifestyles.
The two cases were among the costliest cited in the report, which details roughly $225 million in alleged education fraud nationwide amid a furious federal crackdown.
A coalition of state financial officers identified nearly 90 cases over the past six years involving embezzlement, phony invoices, inflated enrollment, bid-rigging and kickbacks, among other crimes.
California was among the worst offenders of the states analyzed in the report, which found fraud in 24 states and Puerto Rico.
In one case, the small Magnolia School District in Orange County lost about $3,553 per student after a former fiscal services director embezzled nearly $16.7 million to buy a luxury home, car and designer goods.
Jorge Armando Contreras stole the money over several years, spending its everything from a luxury home and a BMW to designer clothes and pricey tequila.
In 2024, a judge sentenced Contreras to 70 months in federal prison for the crimes and ordered him to pay $16.7 million in restitution.
Magnolia is a small elementary school district serving over 4,700 preschool through sixth grade students throughout nine schools in Orange County.
According to prosecutors, Contreras wrote himself checks in small dollar amounts under fictitious names. Once he got the proper signatures from others, he would change the amounts and names and then deposit the checks into his personal bank account.
At the time of his sentencing, law enforcement had seized approximately $7.7 million of Contreras’ property including his Yorba Linda home, a BMW, 57 luxury designer bags, jewelry, designer clothes, designer shoes and eight bottles of fancy tequila.
In another case included in the bombshell report, the Community Preparatory Academy charter school in Los Angeles lost about $9,090 per student after the school’s head stole more than $3 million in taxpayer funds to cover travel, restaurants, shopping and private school tuition for her children.
School executive director Janis Bucknor admitted in 2020 to stealing the funds, prosecutors said, amounting to about one-third of all federal and state funding that the school received over the five-year period when her fraud was committed.
She also pleaded guilty to spending more than $220,600 on Disney cruise line vacations, theme park admissions, and other Disney-related expenses. The former educator was sentenced to three years’ probation and ordered to pay $2.5 million in restitution.
The LA Unified School District first discovered signs of the embezzlement during a routine audit conducted in 2018. In 2019, the district decided not to renew the company’s charter. Community Preparatory Academy is now closed.
The report’s largest cases centered on allegations that two now-closed Indiana online charter schools received $44 million in excess funding by inflating enrollment and a Puerto Rico tutoring company accused of obtaining $24 million by billing for services never provided.
In Florida, a Broward County Public Schools information officer allegedly steered $17 million in contracts to a friend’s business, bypassing competitive bidding while personally profiting from the deals, according to the report.
“All fraud is harmful, but defrauding education dollars meant to help kids learn and succeed is especially hideous,” State Financial Officers Foundation CEO OJ Oleka said in a statement to Fox News Digital.
“The findings in this report should alarm every family, teacher, and civic leader,” Oleka added.
The report comes as the Trump administration promised to crack down on government waste, with Vice President JD Vance leading a nationwide “War on Fraud” that has raised fresh questions about oversight of federal education spending.
