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Ex-O.C. school official arrested in $14-million embezzlement case

A former Orange County school official is accused of embezzling more than $14 million over seven years from the district that employed him, allegedly financing a lavish lifestyle while using a music production company as a front.

Prosecutors said Jorge Armando Contreras, 52, used stolen money to buy a $1.5-million house in Yorba Linda and a $127,000 BMW. He also paid $190,000 to a West Hollywood cosmetic surgeon and dermatologist, and splurged on luxury items from Versace and Louis Vuitton, according to charging documents.

Contreras was earning $220,000 annually as the senior director of fiscal services at Magnolia School District, which serves about 5,300 students from preschool through sixth grade acrossnine schools in West Anaheim and Stanton, many of them low-income schools that receive millions in federal aid.

Contreras was placed in charge of fiscal services in 2013. From 2016-23, federal prosecutors said, he stole money from district funds and deposited more than 250 checks into his personal bank account.

From August 2022 to July 2023 alone, prosecutors allege, Contreras stole $4.1 million from the district, accounting for about 93% of all deposits made in his personal Wells Fargo account.

According to the charges, during that period, he paid $1.9 million to American Express, withdrew $325,000 from ATMs, and transferred more than $130,000 to the person who would become his marriage partner in August 2023.

Contreras was arrested Thursday on charges of embezzling federal funds, which can bring him 10 years in prison if he is convicted.

A federal judge has ordered him held without bail. He is expected to be arraigned Nov. 27. In August, the school district placed him on administrative leave.

An attorney for Contreras did not respond to a request for comment.

A man in a pink and white patterned short sleeve shirt  and sunglasses stands outside.

A photo obtained from court records shows former Orange County school official Jorge Armando Contreras, who is accused by prosecutors of embezzling more than $14 million over seven years from the district that employed him, allegedly using the funds to finance a lavish lifestyle.

(U.S. District Court)

Bank cameras captured Contreras depositing money into his Wells Fargo account under the phony names “Maria Socorro Dominguez” and “Magnia Socorro Dominguez,” the FBI said.

As a front for the embezzlement scheme, the FBI believes, Contreras used a music production company called JC Productions, whose Instagram page boasted of “the best musical productions and live events.”

According to a district official whose name was redacted from the charging documents, “Contreras appeared to live a lifestyle beyond the means of someone in his position at the School District.” and the official assumed he made extra money from his music production company. Once, Contreras gave out $25 Starbucks gift cards to district employees saying the money came from the company.

Frank Donavan, the district’s superintendent, said the district became suspicious in August that Contreras was embezzling funds, reported it to authorities, and quickly filed suit against him. The district said it is trying to freeze and recover about $4 million.

“Mr. Contreras’s actions, which diverted millions of dollars intended to benefit children to his own personal use, are shocking to the conscience and deeply disturbing,” Donavan said in a statement. “The District will continue to aggressively pursue all options to recover funds and to ensure justice is served.”

The school district, where 81% of students are classified as socioeconomically disadvantaged, has received more than $10 million a year in federal funds since 2020, and $2 million in federal funds every year through the prior decade, prosecutors said.

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