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Florida Government Employee Arrested for Mining Cryptocurrencies at Work

Florida man accused of ripping off government agency that rips off taxpayers.

Jason P Ross/Dreamstime.comJason P Ross/Dreamstime.comThe Florida state government has nabbed its first bitcoin bandit.

Yesterday Matthew McDermont, IT manager for the Florida Department of Citrus, was booked into the Polk County, Florida, jail on charges of grand theft and official misconduct. More specifically, he used department computers to mine for cryptocurrencies, including bitcoin and litecoin.

According to the Florida Department of Law Enforcement (FDLE), McDermont spent some $22,000 in department funds on the graphic cards needed for the energy-intensive mining process, which also saw him run up the agency's power bill by $856. According to a FDLE spokesperson, McDermont had netted an estimated $11,857 from his illicit activities.

Using taxpayer-provided resources for personal enrichment is both wrong and illegal, and if McDermont is guilty he deserves the penalties coming his way.

But it's not all that clear that Floridians would have been better off if the Citrus Department's resources had gone to their intended use instead.

According to its website, the Florida Department of Citrus is tasked with the "promotion, protection, and regulation" of the state's $800 million industry of orange and grapefruit growers, a mission for which this bitter bureaucracy was given $18.4 million for the 2016–2017 budget year.

About $6.4 million of this came from direct tax assessments on citrus growers and producers. Another $7.6 million came from general Florida tax revenue, and the rest came from federal Foreign Agricultural Service funds.

In turn for this generosity, the Florida Department of Citrus spent $8.6 million on public relations campaign to promote the use of those famous Florida fruits. That included a paid social media campaign aggressively pushing original content like recipes for 15-minute nachos and whiskey sour punch, along with a printable Advent calendar.

The department's annual report says its social media campaigns garnered 4.5 million clicks at the average cost of 41 cents per click. Were it not for McDermont's alleged illicit crypto-mining, taxpayers could have afforded another 55,746 clicks.

Mind you, that $8.6 million is only what the department spent promoting oranges to other Americans. Their efforts to hawk the Sunshine State's fruit on the international market cost another $4.5 million. Another $1.5 million went to the Gift Fruit program.

While there is a lot in these items that could be said to benefit the citrus industry, there is very little that can be said to benefit the individual taxpayers, both in Florida and across the nation, that fund most of the department's activities. Taxpayers are being asked to essentially support the advertising budget of a major industry that can easily afford its own promotional materials.

If McDermont is guilty, he spent thousands of tax dollars for his own private benefit. That is both wrong and illegal. His employer, meanwhile, spends millions of tax dollars each year for the private benefit of a single industry. That's still wrong, but it's totally legal.

Photo Credit: Jason P Ross/Dreamstime.com

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  • Citizen X - #6||

    The Gift Fruit Program was Crusty's nickname in military school.

  • Chipper Morning Baculum||

    When Crusty offers you a Lady Finger,

  • Diane Reynolds (Paul.)||

    Where's Thomas Friedman telling us we need to be more like China? 'cause in China, they execute you for doing this shit.

  • ThomasD||

    Not really. They execute you for not kicking up.

  • This Machine Chips Fascists||

    "Taxpayers are being asked to essentially support the advertising budget of a major industry that can easily afford its own promotional materials."

    Dude, that's about half of what FL government does. This state is crawling with quasi-government TDCs, EDCs, local, county and regional, paying for shit so chambers of commerce and such can spend their money buying politicians.

  • ThomasD||

    Grew up in Florida, my wife's family (both sides) goes way back. Have known more than a few ranchers and citrus growers.

    While there may be friendships and family ties, as a group these people cannot stand each other.

  • ThomasD||

    ...and if McDermont is guilty he deserves the penalties coming his way.

    If? IF????

    The guy spent just under $23k to 'make' just under $12k. Sure sounds like government work to me.

    Case closed.

  • Juice||

    So did he make $11k by spending $22k+? Or did he "net" $11k because he totaled $33k? For him, everything is profit because he didn't spend any of his own money, so I would guess he made $11k total by spending over $22k.

    So, mining bitcoins seems like a loser unless you can steal the hardware and power.

  • MatthewSlyfield||

    Most of that $22K was upfront money paid for advanced hardware needed for the bitcoin mining process.

    McDermont spent some $22,000 in department funds on the graphic cards needed for the energy-intensive mining process, which also saw him run up the agency's power bill by $856.

    Just $856 in energy costs, so the $11K more than covers his operating cost if he was doing it all on his own dime.

    There is an important piece that's missing from the Reason article. How long was he mining bitcoin before he got caught?

    From the linked Tampa Bay Times article:

    Utility bills for the department jumped by more than 40 percent between October 2017 and January 2017

    Okay, to make sense, January 2017 has to be a typo and they meant January 2018. That means he pulled in $11K in around 4 months or around $2750/month, which would be $33K for a full year.

    Operating expense (power) was $214/month so $2,568/year. So total costs for year one of $24,568 and potential revenue of $33K.

    Not has much as he pocketed in 4 months by stealing the hardware and power, but still profitable.

  • Agammamon||

    If this guy was making this much in that short a time period the FL DoC, instead of arresting him, should have promoted him and expanded his operation. They could have been self-sufficient for funding.

    I did know a guy in the Navy, got busted for hacking the ship's non-class network (as a non-rate) - part of his punishment was to accept a seat at the IT 'A' school.

  • Agammamon||

    No, *you* spent 22k so *he* could make 11k.

    Welcome to the wonderful world of NGO and 'promotion' agencies. You think the department of tourism works any different?

  • Agammamon||

    In any case - he might have made more if he had been able to run longer. 22k up front, 850 a year in expenses, that many machines, probably would have reached ROI in 2-4 years.

  • Get To Da Chippah||

    Let's hope Florida puts the squeeze on this guy.

  • BYODB||

    Wow, ok, this is one government employee that had the right idea.

  • BYODB||


    McDermont spent some $22,000 in department funds on the graphic cards needed for the energy-intensive mining process...

    Wait a minute, so this means all those Venezuelans were buying up something like a GTX1070...in Venezuela, to mine 'coins'? I had no idea that high end (or is it mid-grade?) video cards were needed to 'mine' Concoins.

  • MatthewSlyfield||

    My understanding is that you don't have to have top end graphics cards, but if you want that level of revenue ($11K in bitcoin in just 4 months) you need a lot of them, because you need the graphics co-processors on the cards dedicated full time to the ecoin mining process.

  • BYODB||

    I suppose that makes sense, although now I'm wondering exactly how many of these things he bought.

  • MatthewSlyfield||

    Since when is stealing from the tax payers the right idea for a government employee?

  • BYODB||

    Notably since the formation of government, but more to the actual point it seems like his department would have better served the electorate by dedicating themselves to full time Concoin mining since in that scenario they would actually be providing a benefit but, admittedly, this is some pretty rampant hyperbole on my part. ^_-

  • Agammamon||

    While there is a lot in these items that could be said to benefit the citrus industry,

    1. If it benefits the industry more than it costs the industry - then the industry would voluntarily pay the full costs. There would be no need for a state agency in the first place nor for topping up expenses from the general fund. That this agency exists is prima-facie evidence that it costs more than its worth.

    2. The whole reason for this agencies existence is to inculcate the *false* idea that produce is not a commodity. There's nothing special about Florida citrus. The agency exists to spread 'fake news' and its very existence makes the world a worse place.

    3. Nobody needs a campaign to inform them about the existence of Florida citrus growers - the growers themselves do that by aggressively seeking buyers around the world.

    So, the agency costs more than it delivers, makes the world a worse place by existing, and half its function is redundant and done better by the private actors it purports to represent (at gunpoint) - yet they're surprised when some scumbag employed by an agency full of scumbags takes an 'unauthorized' taste?

    Truly, there is no crime worse than the crime of disloyalty to the gang.

  • Agammamon||

    Oh, you do know he wasn't mining Bitcoin, right? (at least not unless he's a complete moron - and then he'd not have had the technical knowledge to set up a mining rig).

    No one mines BC on GPU's anymore - if you're not running a dedicated SHA256 ASIC you're not even in the running anymore.

    If he's running GPU's then he's mining one of the other cryptos - and may or may not be exchanging *them* for BC (or cash) down the line.

    C'mon guys - you slam the MSM for not doing their homework.

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