LAUSD Employee Charged in $22 Million Kickback Scheme

An employee from the Los Angeles Unified School District is under felony charges related to a $22 million kickback scheme, adding to the ongoing controversies affecting the district.

Hong “Grace” Peng, a former technology project manager for LAUSD, is facing two felony charges: one for money laundering and the other for having a financial stake in a formal contract tied to the alleged fraud.

Los Angeles County District Attorney Nathan Hochman claims that Peng worked in collusion with Texas technology contractor Goutham Sampath in a pay-to-play arrangement. Between 2018 and 2022, they allegedly funneled over $22 million in contract payments to Sampath’s companies.

Hochman alleges that Sampath laundered the money by sending back more than $3 million in kickbacks to Peng through various middlemen.

Sampath himself is charged with three felonies: money laundering, having a financial interest in an official contract, and helping a government official maintain a financial interest in a contract.

“This case illustrates a clear abuse of public trust, with funds meant for students being redirected into private hands,” Hochman stated, adding that the vendor evidently collaborated with LAUSD project managers to establish multi-year contracts that drained millions from schools.

An arrest warrant has been issued for Peng, and an extradition warrant has been put out for Sampath, according to Hochman’s office.

Peng resigned from her position at LAUSD in late 2022 after search warrants were executed at her home and workplace as part of the investigation.

Hochman noted that Sampath and his company, Ineev, currently hold government contracts throughout California and beyond.

If found guilty, each defendant faces the possibility of up to seven years in county jail.

The charges against Peng add to the embarrassment facing the nation’s second-largest school district, especially following the dismissal of LAUSD Superintendent Alberto Carvalho last month. This came after the FBI conducted raids at his residence and office related to his interactions with an AI tech company facing fraud allegations. Carvalho has stated that he is innocent.

Meanwhile, the district is bracing for a potential strike by teachers advocating for increased pay. If no agreement is reached, the strike is slated to commence next month.

In light of Peng’s charges, a district representative affirmed that LAUSD “continues to fully collaborate with law enforcement as necessary.”