Former Employee Charged With Defrauding MDUSD In Fake Invoices Scheme

The following is from the Department of Justice:

A federal grand jury has charged Eric Rego with three counts of mail fraud in connection with a multi-million-dollar scheme to defraud his former employer, the Mt. Diablo Unified School District (MDUSD), through fake invoices for electronic devices that Rego kept and resold. According to an indictment unsealed today, Rego, 39, a resident of El Dorado Hills, Calif., committed fraud by using MDUSD funds earmarked for an after-school program to purchase tablet computers and other electronic devices that he then sold for his own profit.  Rego was an employee of MDUSD, a public school district in Contra Costa County.  The school district had an after-school program that offered to students in transitional kindergarten through twelfth grade academic, recreational, and environmental programming.  The after-school program was free to students and funded primarily through state grants designed to benefit high-need population areas.  Rego was MDUSD’s after-school program coordinator. The school district had a contract with a nonprofit (referred to as Nonprofit 1) to run its after-school program.  As the program coordinator, Rego worked closely with Nonprofit 1.  Beginning around July 2020 and continuing through around May 2024, Rego purchased or caused to be purchased iPads, MacBooks, GoPro cameras, and other electronic devices through Nonprofit 1.  Rego allegedly falsely claimed to a Nonprofit 1 employee that the iPads and other devices were needed for students in the after-school program, but instead kept the devices and resold them at a fraction of their cost. To carry out his scheme, Rego directed a Nonprofit 1 employee to submit monthly invoices containing a line-item expense for subcontracts and supplies and to include the cost of the iPads and other devices in this line-item.  Rego reviewed and approved these monthly invoices and caused their submission to MDUSD for processing and payment.  In so doing, Rego falsely represented to MDUSD that the invoices were for Nonprofit 1’s expenses incurred from operating the after-school program.  In all, the indictment alleges that Rego fraudulently obtained iPads, MacBooks, GoPro cameras, and other devices at a cost of not less than approximately $3.3 million.

The defendant was arrested today and will appear in federal district court in Sacramento on Feb. 5, 2025.

An indictment merely alleges that crimes have been committed and the defendant is presumed innocent unless and until proven guilty.  If convicted, defendant faces a maximum sentence of 20 years in prison and a fine of $250,000 for each count of mail fraud.

The following is from MDUSD Superintendent Adam Clark:

Today, a former Mt. Diablo Unified School District (MDUSD) employee was arrested and criminally charged following an investigation into the misuse of District funds. The District first uncovered evidence indicating potential financial misconduct related to contracts with an afterschool care provider and took immediate action by filing a report with the Concord Police Department. Additionally, the District hired an independent forensic accountant to conduct a financial audit. The District’s internal review found that public funds intended for student services were potentially misappropriated. Specifically, initial findings suggest that hundreds of electronic devices, including iPads, were purchased but never delivered to District sites or used for student programs. The District is working closely with local, state, and federal law enforcement agencies to ensure a full and thorough investigation, and it will pursue all legal avenues to recover any misused funds. “Educating our children is our most pressing priority,” said Superintendent Dr. Adam Clark. “Anyone who attempts to misuse funds intended for the education of our students will be held accountable. We are committed to full transparency and will continue to take decisive action to safeguard public resources and protect the integrity of our programs.” As this matter involves ongoing litigation, the District cannot comment further on specific details at this time. However, we will continue to provide updates as appropriate.