LA school district worker and tech company owner charged in $22M bribery scheme

Charges in Major LAUSD Money Laundering Case

A former employee of the Los Angeles Unified School District (LAUSD) and the head of a tech company are now facing felony charges in what prosecutors describe as one of the largest money laundering operations in the district’s history.

Hong “Grace” Peng, who previously worked as a technology project manager at LAUSD, along with Gautam Sampath, the owner of the tech firm Innaive, are accused of running a multi-year “pay-to-play” scheme that supposedly funneled over $22 million in district contracts to Sampath.

Los Angeles County District Attorney Nathan Hochman commented on the situation, stating that the case reflects a serious betrayal of public trust, with student tax dollars misappropriated for private gain. He emphasized that this vendor allegedly colluded with LAUSD project managers to implement a long-term scheme that drained significant funds from schools.

According to legal authorities, Peng entered into contracts related to the My Integrated Student Information System (MiSiS) between 2018 and 2022. Prosecutors assert that contracts totaling $22 million were primarily intended for Innaive, through which Sampath allegedly transferred over $3 million to Peng via intermediaries.

Investigators found messages between Peng and Sampath discussing how to delete conversations, secure contracts, and manage the movement of funds. Peng is charged with felony money laundering and possession of an unlawful financial interest in a government contract.

Sampath, who is based in Texas, faces similar charges, along with an extra charge of aiding and abetting a public official. There is currently a warrant out for Peng’s arrest, and Sampath may be extradited to California. As of now, a trial date hasn’t been established.

Peng resigned from her position at LAUSD at the end of 2022, following investigations that included search warrants executed at her home and place of work. It’s worth noting that Sampath and his company are still receiving government contracts in California and other states.

If found guilty, both Peng and Sampath could face up to seven years in county jail. Hochman stated firmly that public officials who misuse their responsibilities or contractors who manipulate the system to enrich themselves will not be tolerated. Both individuals will be held accountable for their actions.

LAUSD released a statement indicating that they are aware of the charges against Peng and reaffirmed their commitment to adhering to legal standards. The district expects its employees and business partners to uphold high ethical principles and will continue to cooperate with authorities.