Two Charged in $22 Million Kickback Scheme Involving LAUSD
A former employee of the Los Angeles Unified School District (LAUSD) and a technology vendor’s owner have been indicted for allegedly orchestrating a kickback scheme worth $22 million that misappropriated taxpayer money meant for educational purposes.
The Los Angeles County District Attorney’s Office reported that Hong “Grace” Penn, 53, from Pasadena, and Gautam Sampath, 53, from Flower Mound, Texas, face multiple charges.
“This case illustrates a severe breach of public trust, with taxpayer dollars designated for students going into private hands,” said a representative from the District Attorney’s Office.
Penn had served as a technical project manager at LAUSD from 2018 to 2022, during which time she allegedly participated in awarding contracts unlawfully. She’s accused of issuing contracts totaling over $22 million to Sampath’s companies.
Sampath, on the other hand, is accused of laundering more than $3 million to Penn.
Penn left her position at LAUSD after a search warrant was executed in late 2022, which was tied to investigations of wrongdoing. She now faces a felony charge of money laundering and having a financial interest in contracts linked to her official role.
Sampath also faces charges of money laundering, holding a financial stake in a contract or purchase made officially, as well as aiding and abetting a government official in obtaining a financial interest in a contract.
If found guilty, both could receive sentences of up to seven years in prison.
Authorities have issued an arrest warrant for Penn and an extradition warrant for Sampath.
From 2018 to 2022, it is claimed that Penn approved or suggested allocating over $22 million in LAUSD funds to Innive. From 2017 to 2023, the vendor is said to have received more than $39 million from LAUSD. Additionally, during 2018 to 2022, Penn reportedly received over $3 million from Sampath or related entities.
The complaint reveals that Sampath, in a text from February 2018, instructed Penn to “delete all” messages, suggesting that there was an awareness of wrongdoing. Moreover, in June of the same year, he asked Penn about potential opportunities within LAUSD.
“This situation represents a clear violation of public trust,” remarked Los Angeles County District Attorney Nathan Hochman. “Our commitment is to hold accountable those officials who exploit their positions for personal gain, as well as the contractors who manipulate the system.”
In response to the allegations, LAUSD released a statement acknowledging the charges against the former employee. They mentioned that the district learned of a possible conflict of interest in April 2022 and promptly directed the case to the Office of Inspector General, leading to the current legal actions.
“LAUSD stands firmly against any unethical conduct and pledges to cooperate fully with authorities,” the school district stated, adding that they would refrain from further comments due to ongoing legal proceedings.
Neither Sampath, Penn, nor their associated parties have provided comments regarding the situation.
