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    California School Official Who Embezzled $16.7 Million Gets Nearly 6 Years in Prison

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    Jorge Armando Contreras used his position at a school district in Orange County to fund a luxurious lifestyle, prosecutors said.A former California public school official who embezzled more than $16 million from a school district and used the money to fund a lavish lifestyle was sentenced to nearly six years in prison this week, according to the Justice Department.A federal judge on Thursday sentenced Jorge Armando Contreras, 53, who worked for the Magnolia School District in Orange County, to 70 months and ordered him to pay $16,694,942 in restitution. Mr. Contreras, of Yorba Linda, Calif., had pleaded guilty in March to one count of embezzlement, theft and intentional misapplication of funds from an organization receiving federal funds, the U.S. attorney’s office said. Martin Estrada, the U.S. attorney for the Central District of California, said in a statement that “instead of using his job at a public school district to help socioeconomically disadvantaged children,” Mr. Contreras had embezzled millions of dollars in a scheme that fraudulently created for him a life of opulence.He used the money to buy a range of luxurious products like Louis Vuitton bags and $2,000 tequila bottles, according to the Justice Department. About $7.7 million in personal and real property traced to the scheme have been seized, officials said.Mr. Contreras’s lawyer, Ronald D. Hedding, did not immediately respond to an email seeking comment on Saturday.Court documents show that Mr. Contreras’s embezzling scheme appeared to have begun in 2016 and lasted until July 2023. During that period, he worked as the director and senior director of fiscal services at the school district, which serves students from preschool through sixth grade in Anaheim and Stanton, cities about 25 miles southeast of Los Angeles. About 81 percent of those students classify as socioeconomically disadvantaged, prosecutors said.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Brazil Police Accuse Bolsonaro of Embezzling Saudi Jewels

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      Brazil’s former president, Jair Bolsonaro, may soon face criminal charges for stealing gifts he received from foreign leaders.Brazil’s federal police recommended that former President Jair Bolsonaro be criminally charged in a scheme to embezzle jewelry he received as gifts from foreign leaders while president, according to two people close to the investigation, adding another major legal challenge for Mr. Bolsonaro.The federal police accused Mr. Bolsonaro and 10 of his allies of trying to keep and sell expensive gifts that he received from foreign governments, said the people, who spoke on the condition of anonymity to describe sealed case files. The police are seeking money laundering and criminal association charges against Mr. Bolsonaro and some of his allies, including former aides.In one case, Mr. Bolsonaro and his team sought to conceal $1 million worth of diamond jewelry that the former president received from the Saudi Arabian government, according to past investigative documents.In another, Mr. Bolsonaro’s team tried and failed to sell an 18-karat gold set from the Saudis for $50,000 at a Manhattan auction house during a Valentine’s Day sale last year, the documents show. In a third, they sold two luxury watches at a Pennsylvania mall for $68,000 and delivered some of the cash to Mr. Bolsonaro, the documents show.While Brazilian police call such recommended charges an “indictment” in Portuguese, Mr. Bolsonaro has not been charged. The country’s top federal prosecutor must now decide whether to charge Mr. Bolsonaro and force him to stand trial. That prosecutor and Brazil’s Supreme Court said they had not yet received the recommendations from police as of Thursday night.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      The Eugene Weekly Will Resume Printing After Embezzlement Discovery

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      The Eugene Weekly was forced to lay off all 10 of its staff members last month after it discovered tens of thousands of dollars in unpaid bills.A weekly newspaper in Oregon that laid off all of its workers in December after an employee embezzled tens of thousands of dollars will resume its print edition on Feb. 8 after raising enough money through donations, its editor said on Sunday.The newspaper, The Eugene Weekly, abruptly stopped printing after it discovered financial problems, including money not being paid into employee retirement accounts and $70,000 in unpaid bills to the newspaper’s printer, leading it to lay off all 10 of its staff members just days before Christmas, its editor, Camilla Mortensen, said at the time.Over the past month, however, Ms. Mortensen has continued publishing articles online with the help of interns, freelancers and retired reporters and editors — many of whom were willing to work without pay to keep the paper afloat — she said on Sunday.As of this week, Ms. Mortensen and three other staff members will be brought back onto the payroll in preparation for the Feb. 8 edition, she said, noting that the return to print was made possible by readers and members of the public who raised at least $150,000 after the financial problems were reported.“With all this support from people, there’s just no way we can’t try — we have to try printing,” Ms. Mortensen said.The theft, leaders of the newspaper said in a Dec. 28 letter to readers, had been hidden for years and left its finances “in shambles.” The paper has hired a forensic accountant to investigate.Leaders of the paper said that while the situation was unprecedented, they believed in the newspaper’s mission, and were “determined to keep EW alive.”The Eugene Police Department could not be immediately reached on Sunday evening for comment about the embezzlement but said previously that it was investigating. The now-former employee accused of stealing, who was involved in the newspaper’s finances, has not been publicly identified.The free paper, founded in 1982, previously printed 30,000 copies each week. Copies could be found in bright red boxes in and around Eugene, Oregon’s third-largest city.Ms. Mortensen, who became editor in 2016 after nearly a decade at the paper, said Sunday that the closure had been painful.“Every time I walk by one of our little red boxes, there’s no paper in it, it stabs me in the heart,” she said, noting that the plan was to print 5,000 fewer copies so that the paper could remain sustainable.“Obviously, this outpouring has been amazing,” she said, “but we also want to go back to being this free weekly paper that pays for itself.” More

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      Ecuador’s President Dissolves Congress Amid Impeachment Trial

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      President Guillermo Lasso disbanded the National Assembly as the opposition-led body was trying to oust him on embezzlement charges.President Guillermo Lasso of Ecuador disbanded the country’s opposition-led National Assembly on Wednesday, a drastic move as the right-leaning leader faced impeachment proceedings over accusations of embezzlement.The constitutional measure, never before used, allows the president to rule by decree until new elections can be held, marking a moment of extraordinary political turbulence for a country of 18 million already in turmoil.Ecuador has long been a relative haven in the region, but in recent years it has been convulsed by rising violence and a skyrocketing homicide rate as increasingly powerful narco-trafficking groups fight for territory.Opposition lawmakers accused Mr. Lasso of turning a blind eye to irregularities and embezzlement in a contract between a state-run shipping company and an oil tanker company that wasn’t delivering on its promises — allegations first made in news reports. The country’s constitutional court later approved a charge of embezzlement against the president but denied two charges of bribery.The charge was being investigated by congress and is political in nature. It is not a criminal charge.Last week, the National Assembly voted to begin impeachment hearings, but all proceedings were permanently halted once Mr. Lasso dissolved congress.The president has repeatedly denied the charges, pointing out that the contract was signed before he took office.“The prosecutors of this trial have acknowledged that they have nothing,” Mr. Lasso said on Tuesday during the impeachment proceeding. “This inquiry is political.”He added, “This is not about saving a presidency, but about preserving a functioning democracy.”This was the second time the opposition had tried to remove Mr. Lasso from the presidency since he took office in 2021.He has faced growing criticism and petitions for his removal from civil society groups in the face of soaring rates of crime, extortion, kidnappings and robberies. Gangs battle for control of drug routes and have gained greater control over the country’s prisons, leading to several prison riots and massacres over the last three years.For weeks, the president and congress were locked in a game of brinkmanship, with legislators threatening to impeach and remove Mr. Lasso as he threatened to dissolve congress and call new elections — a move known in Ecuador as muerte cruzada, or mutually assured death.The mechanism was written into the Constitution in 2008 as a tool to end deadlocks between the presidency and the legislature. But until now, no president had ever enacted it.With Mr. Lasso’s approval ratings plummeting, in some cases below 20 percent, he will govern by decree until new elections are held. The Constitution gives the national election body seven days to set a date for a presidential and legislative vote. The newly elected president and National Assembly would then govern until the end of the original term, 2025.The disbanding of congress provides temporary stability for the country, said Arianna Tanca, an Ecuadorean political scientist, allowing Mr. Lasso to pass laws without a deadlock and giving political parties the chance for a “reset.”But it also threatens to undercut the country’s democracy. A head of government calling for new elections is common in parliamentary democracies, but has no parallel in other presidential democracies in Latin America, said Mauricio Alarcón Salvador, the director of Transparency International’s chapter in Ecuador.“To see a president shut down the assembly and assume legislative power in a transitory manner is, undoubtedly, a blow to democracy,” he said, “and, above all, to the system of checks and balances that should be in force in any democracy in the world.”Mr. Lasso’s decision comes amid upheaval in the region. In December, Peru’s president attempted to dissolve congress — in this case an illegal move that led to his removal and arrest, and then to widespread protests that left dozens of people dead.In January, supporters of former President Jair Bolsonaro of Brazil stormed government buildings in the capital, arguing that November’s election, in which he was defeated, had been rigged.Will Freeman, a fellow for Latin America studies at the Council on Foreign Relations, said that Mr. Lasso’s decision to go around legislators could — possibly — be good for him.“Even though he is very unpopular now, I could see six months of rule by decree actually boosting his popularity if he can do something quickly about the twin crises of crime, and hunger and poverty,” he said. “Although, given his track record, that’s a big if.”Some human rights activists said they worry that Mr. Lasso’s power to govern by decree could open the door for serious rights violations, like using terrorism laws to target Indigenous organizations and other groups that might oppose him.“The executive branch governing by decree could continue to exacerbate and favor the interests of the banks, the oil mining companies and certain privileged sectors, to the detriment of the rights of the majorities,” said Lina María Espinosa, a human rights lawyer.Mr. Lasso’s first act on Wednesday under his new powers was a tax cut for businesses and middle-class Ecuadoreans, a move that was welcomed by María Paz Jervis, the president of the Chambers of Industries and Production, a business group.While the dissolution of the legislature could lead to unrest and hurt the economy, Ms. Jervis said new elections were a positive development for a country that needed economic growth, to fight poverty and to produce more jobs.“After this weariness, after this burden that we have felt with this political class, we believe that it is the moment to inaugurate a new politics in Ecuador,” she said.José María León Cabrera More

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      Fugees Rapper Pras Michel Found Guilty in Illegal Foreign Influence Scheme

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      Mr. Michel took orders, and millions of dollars, from a Malaysian financier who sought to gain political influence in the U.S., prosecutors said.A founding member of the hip-hop group the Fugees was found guilty in federal court on Wednesday of orchestrating a sprawling international conspiracy that used millions of dollars worth of foreign money for illegal lobbying and campaign contributions, the Justice Department said.The rapper Prakazrel Michel, known as Pras, had been accused of accepting $865,000 from Low Taek Jho, a Malaysian financier, and giving that money to a network of straw donors who used it to make campaign contributions to former President Barack Obama in 2012.Mr. Michel was also accused by prosecutors of trying to convince the Trump administration and the Justice Department to drop federal investigations into Mr. Low related to embezzlement, as well as assisting China in its efforts to have a Chinese dissident brought back to China, according to the Justice Department.Mr. Michel, who received millions of dollars for his part in the schemes, was convicted of 10 criminal counts including money laundering, illegal lobbying, witness tampering and campaign finance violations, according to court records. He faces a maximum possible sentence of 20 years in prison.“Today’s verdict demonstrates that anyone who engages in unlawful foreign-sponsored efforts to influence American officials, our elections, or the criminal justice system will be brought to justice,” Kenneth A. Polite, Jr., an assistant attorney general with the Justice Department, said in a statement.Mr. Michel’s lawyer, David E. Kenner, did not immediately respond to a call seeking comment on Wednesday evening.Mr. Michel’s conviction in U.S. District Court in Washington followed an extensive trial that included testimony from several big names in entertainment and political circles, including Leonardo DiCaprio and former Attorney General Jeff Sessions, according to The Associated Press and Politico.Mr. DiCaprio testified that Mr. Low seemed to be a legitimate businessman years ago when he said he wanted to donate to the Obama campaign, and Mr. Sessions testified about his knowledge of the Chinese extradition efforts.Prosecutors argued that Mr. Low essentially used Mr. Michel for back-channel dealings in the U.S., and that Mr. Michel was a subservient accomplice.Mr. Low, also known as Jho Low, is a fugitive and has been wanted by law enforcement in the United States and Malaysia for his role in the theft of $4.5 billion from a Malaysian sovereign wealth fund, according to the Justice Department. That case contributed to the electoral defeat and eventual indictment of that country’s former prime minister, Najib Razak.Mr. Michel, 50, of Coconut Creek, Fla., conspired with Mr. Low to funnel millions of dollars of Mr. Low’s money into the 2012 U.S. presidential election “as purportedly legitimate campaign contributions, all while concealing the true source of the money,” prosecutors said.Mr. Michel would receive Mr. Low’s money and contribute to Mr. Obama’s campaign personally and through about 20 straw donors, court records state. The men’s goals were to “gain access to, and potential influence with” Mr. Obama’s administration, according to prosecutors.The indictment accused Mr. Michel and Mr. Low of concealing the scheme from the Obama administration and from federal regulators.Federal officials learned of their activity in 2017. Mr. Michel was charged in 2019.Harry A. Lidsk, a special agent with the Justice Department, said in a statement that Mr. Michel “played a central role in a wide-ranging conspiracy to improperly influence top government officials.”In 2017, Mr. Michel also began to “engage in undisclosed lobbying campaigns” at the orders of Mr. Low and a Chinese government official, prosecutors said. Mr. Low wanted to have his embezzlement investigation dropped, and the Chinese official asked Mr. Low to help them get a Chinese dissident extradited, the Justice Department said.Mr. Michel did not manage to sway U.S. officials on either matter, court records show.Glenn Thrush More

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      Sam Bankman-Fried and Allies’ Political Donations Under Scrutiny by US

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      Federal prosecutors appear to be focusing on possible wrongdoing by cryptocurrency executives, rather than by Democratic or Republican politicians. But the inquiries widen an explosive campaign finance scandal.WASHINGTON — Federal prosecutors in Manhattan are seeking information from Democrats and Republicans about donations from the disgraced cryptocurrency entrepreneur Sam Bankman-Fried and two former executives at the companies he co-founded.In the days after Mr. Bankman-Fried was arrested on Monday and charged with violations including a major campaign finance scheme, the prosecutors reached out to representatives for campaigns and committees that had received millions of dollars from Mr. Bankman-Fried, his colleagues and their companies.A law firm representing some of the most important Democratic political organizations — including the party’s official campaign arms, its biggest super PACs and the campaigns of high-profile politicians such as Representative Hakeem Jeffries — received an email from a prosecutor in the United States attorney’s office for the Southern District of New York. The email sought information about donations from Mr. Bankman-Fried, his colleagues and companies, according to people familiar with the request, who insisted on anonymity to discuss an ongoing law enforcement matter.The prosecutors have reached out to representatives of other Democratic campaigns that received money linked to the cryptocurrency exchange FTX, which Mr. Bankman-Fried co-founded, according to two other people familiar with the matter. Prosecutors are also investigating donations to Republican campaigns and committees by another FTX executive who was a top financier on the right, according to a person familiar with the situation.So far, Mr. Bankman-Fried is the only executive to face charges. Since emerging as a leading political megadonor in the months before the 2020 election, he has donated nearly $45 million, primarily to Democratic campaigns and committees that are now scrambling to distance themselves.There has not been any suggestion that political campaigns and groups engaged in wrongdoing related to the donations they received. The Justice Department’s inquiries appear to be an effort to gather evidence against Mr. Bankman-Fried and other former FTX executives, rather than against their political beneficiaries.But the prosecutors’ requests widen what has quickly become one of the biggest campaign finance scandals in years, as both Democrats and Republicans grapple with questions about their eagerness to tap into a stream of cash from a murky and largely unregulated industry that emerged suddenly as a powerful political player.The fallout has been swift and is only growing, as lawmakers, operatives for political action committees and their lawyers try to minimize the damage.Some politicians — including Mr. Jeffries, the incoming Democratic leader in the House, and Representative-elect Aaron Bean, a Republican from Florida — either returned donations linked to FTX or gave the money to charity after the company became embroiled in scandal. Other groups say they are setting the cash aside for possible restitution to victims of the alleged scheme.Prosecutors said FTX was a “house of cards” through which Mr. Bankman-Fried and others diverted customer money to buy expensive real estate in the Bahamas, invest in other cryptocurrency firms, provide themselves with personal loans and make political contributions of tens of millions of dollars intended to influence policy decisions on cryptocurrency and other issues.What to Know About the Collapse of FTXCard 1 of 5What is FTX? More

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      Election Firm Knew Data Had Been Sent to China, Prosecutors Say

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      The executive of a small Michigan elections software company was charged with grand theft by embezzlement and conspiracy to commit a crime.Before the arrest of its founder and chief executive, Eugene Yu, Konnech repeatedly denied keeping data outside the United States, including in statements to The New York Times.Emily Elconin for The New York TimesWhen Eugene Yu’s small election software company signed a contract to help Los Angeles County organize poll workers for the 2020 election, he agreed to keep the workers’ personal data in the United States.But the company, Konnech, transferred personal data on thousands of the election workers to developers in China who were writing and troubleshooting software, according to a court filing that Los Angeles County prosecutors made on Thursday.The filing adds new details about the arrest last week of Mr. Yu, whose company has been the focus of groups challenging the validity of the 2020 presidential election. Some of those groups have accused the company of storing information about poll workers on servers in China. Before the arrest, the company repeatedly denied keeping data outside the United States, including in statements to The New York Times.Los Angeles prosecutors initially accused Mr. Yu of embezzling public money by knowingly violating the terms of the company’s contract. Since searching Konnech’s offices and Mr. Yu’s home, the prosecutors have also accused him of conspiring with others to commit a crime, according to the new legal filing. It is rare for an executive to face criminal charges for potentially mishandling data. He is scheduled to be arraigned on Friday.In the filing, prosecutors said a project manager at Konnech had sent an internal email early this month saying the company would no longer send personal data to Chinese contractors. “We need to ensure the security privacy and confidentially,” the email said.In a separate message, sent in August, the project manager noted that the contractors had high-level access to all of the poll worker software used by its customers. He called it a “huge security issue.”The documents did not specify whether others were being investigated or would be charged, and the district attorney’s office declined to comment.The State of the 2022 Midterm ElectionsWith the primaries over, both parties are shifting their focus to the general election on Nov. 8.The Final Stretch: With less than one month until Election Day, Republicans remain favored to take over the House, but momentum in the pitched battle for the Senate has seesawed back and forth.A Surprising Battleground: New York has emerged from a haywire redistricting cycle as perhaps the most consequential congressional battleground in the country. For Democrats, the uncertainty is particularly jarring.Pennsylvania Governor’s Race: Attacks by Doug Mastriano, the G.O.P. nominee, on the Jewish school where Josh Shapiro, the Democratic candidate, sends his children have set off an outcry about antisemitic signaling.Herschel Walker: The Republican Senate nominee in Georgia reportedly paid for an ex-girlfriend’s abortion, but some conservative Christians have learned to tolerate the behavior of those who advance their cause.Los Angeles prosecutors said last week that none of Mr. Yu’s or Konnech’s actions had altered election results and that they had seen no evidence of identity theft. They have not indicated any motive in their public statements.The prosecutors said that the charges focused on the handling of personal information about poll workers, such as their names and phone numbers, and that the data did not relate to ballots or the voting process. Still, with the midterm elections just weeks away, several counties that use Konnech software said they were rushing to reassure voters that their elections were secure.Mr. Yu’s lawyer did not immediately respond to a request for comment.Konnech, which is based in Michigan, has about 20 employees in the United States and about 20 customers. It plays no role in the tabulation or counting of votes in American elections.Nevertheless, some election deniers have targeted the company, saying they discovered the company’s data in China and suggesting that Konnech gave the Chinese government a back door to manipulate America’s election process. The New York Times published an article about those claims early last week, as a part of its coverage of misinformation and elections.Los Angeles prosecutors arrested Mr. Yu the day after the article was published, raising questions about the truthfulness of statements that Mr. Yu made to The Times just days earlier, when he denied the accusations and said poll worker data had never been stored in China.If convicted, Mr. Yu faces a maximum sentence of three years in prison for the charges of grand theft by embezzlement of public funds and conspiracy to commit a crime. He also faces an additional five years because the contract was valued at more than $500,000.A ballot-tallying center in Los Angeles County. Officials have said the county will continue to use Konnech’s software to manage data on about 12,000 to 14,000 poll workers for the midterm elections.Allison Zaucha for The New York TimesThe district attorney’s office said it was sifting through a trove of documents seized in its search of Konnech’s offices and Mr. Yu’s home last week. If those files reveal similar crimes in other counties, prosecutors could hand off the case to federal investigators.More than 20 attorneys general, district attorneys and election officials have contacted the district attorney’s office over the past week, they said.Mark Kriger, one of Mr. Yu’s lawyers, said in a bond hearing last week that Mr. Yu had participated in two voluntary interviews several weeks ago with the Federal Bureau of Investigation. Mr. Yu told the agency that he was not aware of any data from Konnech being stored in China, the lawyer said at the hearing.The F.B.I. agents were surprised to learn about Mr. Yu’s arrest, Mr. Kriger said at the hearing. A spokeswoman for the F.B.I. said she “wouldn’t be in the position to confirm or deny comments made by the attorney.”Mr. Yu, 64 and a Chinese-born American citizen, co-founded Konnech in 2002 as a phone technology company. He turned it into an elections software company in the late 2000s.In statements made to The New York Times before his arrest, Mr. Yu said that he had shuttered Konnech’s Chinese subsidiary in 2021 and that he no longer had employees there. Two people with knowledge of the company, who would speak only anonymously because of the legal proceedings, said it was known within Konnech that employees should avoid bringing up the use of Chinese contractors when talking to customers.Attention on the company surged in August and September after a conference hosted by Catherine Engelbrecht, the founder of True the Vote, a nonprofit that claims to be searching for evidence of voter fraud, and Gregg Phillips, an election denier and longtime associate of the group.The group claimed that their team had discovered and downloaded Konnech’s data from servers located in China.Mr. Yu later sued the group for defamation, hacking and other charges, and hired a crisis management company. That case, based in Texas, is continuing.The Los Angeles County district attorney’s office said its investigation began after Mr. Phillips had sent a tip to its public integrity division. When it announced the charges last week, the district attorney’s office told The New York Times in a statement that the group’s investigation had no input on the county’s investigation.After Mr. Yu’s arrest, Konnech sent an identical letter to several customers claiming that they had “never hosted your data or system in servers outside of the United States.”Fairfax County, Va., the City of Detroit, and Prince William County, Va., terminated their contracts with Konnech after Mr. Yu’s arrest.Los Angeles County said it would continue using Konnech software to manage data on about 12,000 to 14,000 poll workers for the midterm elections.Dekalb County in Georgia voted to keep its contract with Konnech, adding an amendment that the data would be stored on servers owned by Dekalb County instead of by Konnech.“We’re one week out from early voting starting in Georgia and run the risk of our election operations going awry from a company that is going down in flames,” Marci McCarthy, the chairwoman for the county’s Republican Party, said in an interview after the vote.“It’s not over,” she added. 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