This was organized crime by a corrupt school official. This isn't petty crime. So I don't think this situation is one of those that "does nothing useful" to have severe consequences. Additionally, your dismissal of the circumstances around the crime seems odd. This person stole from the most vulnerable where restitution isn't possible because we don't have time machines and they stole an amount that restitution is beyond the means of the thief without further commiting theft or fraud.

Jail is the best option here. I think the sentencing could be lighter and the parole and probation system should be fixed, but there's not much better to be done in a scenario like this.

Also I think making kids starve constitues violence.