Mt. Diablo USD Employee Pocketed Millions In Fake Invoice Scheme: Feds

EAST BAY, CA— A former employee of the Mt. Diablo Unified School District was arrested and charged this week in a suspected multi-million-dollar scheme involving fake invoices, the U.S. Attorney's Office said.

A federal grand jury charged Eric Rego, 39, a resident of El Dorado Hills and Brentwood, with three counts of mail fraud in a suspected scheme in which he used district funds to pay for MacBooks, iPads, GoPros and other electronic devices that he kept and sold.

According to an indictment unsealed Tuesday, Rego committed fraud by using MDUSD funds earmarked for an after-school program to pay for at least $3.3 million worth of the devices.

It is alleged he committed the fraud while working as a coordinator for an after-school program. MDUSD funded the program primarily with state grants and had a contract with a nonprofit to run the program geared toward TK-12th grade students from high-need population areas.

As the program coordinator, Rego worked closely with the nonprofit.

The indictment alleges that from July 2020 through May 2024, Rego purchased the electronic devices through the nonprofit, then falsely claimed to an employee of the nonprofit that the tablets, laptops and other devices were needed for students in the after-school program. However, it is alleged he kept the devices and resold them at a fraction of their original cost.

Federal prosecutors alleged that to carry out the scheme, Rego directed an employee of the nonprofit 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," prosecutors said. "In so doing, Rego falsely represented to MDUSD that the invoices were for [...] 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."

Rego was arrested Tuesday following an investigation by the FBI and the Concord Police Department with the cooperation of the Mt. Diablo Unified School District and Superintendent Adam Clark.

When evidence indicating potential financial misconduct related to contracts with the after-school care provider was initially uncovered by the district, it took immediate action by filing a report with the Concord Police Department, MDUSD Spokesperson Theresa Harrington Brandt said in a statement released Tuesday.

"Additionally, the District hired an independent forensic accountant to conduct a financial audit," Brandt said. "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."

Brandt said the district was working closely with local, state and federal law enforcement agencies to ensure a full and thorough investigation and will pursue all legal avenues to recover any misused funds.

"Educating our children is our most pressing priority," Superintendent Adam Clark said. "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."

Because the matter involves ongoing litigation, Brandt said the district could not comment further on specific details but would continue to provide updates as appropriate.

Rego was set to appear Wednesday in federal court in Sacramento. If convicted, he faces a maximum sentence of 20 years in prison and a fine of $750,000 ($250,000 for each count of mail fraud.).