Los Angeles County District Attorney’s Office announced on Thursday (26th) that they have filed serious charges against a technology project manager and a vendor responsible at the Los Angeles Unified School District (LAUSD), involving government contract corruption and money laundering exceeding $22 million.
This case is identified as one of the largest corruption and money laundering cases in the history of LAUSD.
District Attorney Hochman stated that this case involved the blatant misuse of public trust, diverting taxpayer funds meant for student education into personal pockets.
The two defendants are accused of engaging in “pay-to-play” transactions, funneling funds within the school system to a specific company through multiple contracts over several years, totaling over $22 million.
Hochman emphasized, “We will not tolerate public officials abusing their positions, nor contractors profiting at the expense of the system. Both defendants will be held accountable.”
The 54-year-old LAUSD technology project manager, Hong “Grace” Peng, and the 54-year-old owner of the Texas-based technology company Innive, Gautham Sampath, are both charged with one count of money laundering and one count of profiting from public office abuse. Additionally, Sampath faces an additional charge of aiding public officials in profiting.
Currently, Peng has an arrest warrant issued against her, while an extradition warrant was issued for Sampath.
The prosecution revealed that between 2018 and 2022, Peng, during her tenure as the LAUSD technology project manager, allegedly unlawfully awarded multiple contracts related to the “My Integrated Student Information System” (MiSiS) to Innive, a company owned by Sampath, totaling over $22 million.
Sampath is also accused of transferring over $3 million through several intermediaries for laundering and then returning it to Peng.
This case was first exposed in April 2022. By the end of the same year, law enforcement officers executed search warrants at Peng’s residence and place of work, resulting in her resignation from LAUSD. Sampath and his company, Innive, still hold government contracts in California and across the United States.
If convicted, each defendant could face a maximum of seven years in prison.
Law enforcement authorities urge anyone who has had contracts with Innive to contact the Public Integrity Division at (213) 257-2475 or provide relevant information through an online form.
Earlier this year, the Federal Bureau of Investigation (FBI) also executed a search warrant related to suspected LAUSD fund misuse and corruption.
On February 25th, the FBI conducted a raid at the LAUSD headquarters and the residence of superintendent Alberto Carvalho.
Last year, a group of LAUSD students and former superintendent Austin Beutner filed a lawsuit accusing Carvalho and the school district of misusing nearly $77 million from Proposition 28 funds, originally intended for arts and music education.
The Los Angeles Unified School District is the second-largest public school district in the United States, overseeing 783 schools with a student population that once exceeded 500,000.