Former employee charged with defrauding Mt. Diablo Unified School District of $3.3M

CONTRA COSTA COUNTY, CA (Feb. 4, 2025) —Mt. Diablo Unified School District released a statement following the arrest of a former employee for fraud.

The Dept. of Justice announced that Eric Rego 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 Rego potentially misappropriated public funds intended for student services. 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 will continue to work closely with local, state, and federal law enforcement agencies to ensure a full and thorough investigation. 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.”

Federal charges filed

A federal grand jury charged Eric Rego with three counts of mail fraud. The charges allege a multi-million-dollar scheme to defraud his former employer, the Mt. Diablo Unified School District (MDUSD). The case involves 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. He then sold the items 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 acted as 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. The invoices included 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.

Arrest

Agents arrested the defendant Tuesday, Feb. 4. He will appear in federal district court in Sacramento on Feb. 5, 2025.

An indictment merely alleges that crimes have been committed. 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 court would impose any sentence following conviction after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.