Felony Charges in LAUSD Contract Scandal
A former employee of the Los Angeles Unified School District (LAUSD) and the head of a technology vendor have been charged with felony offenses for allegedly misappropriating over $22 million in district contracts.
The announcement came from Los Angeles County District Attorney Nathan J. Hockman, who characterized the situation as “the largest money laundering scandal” in the history of the school district.
Hong “Grace” Peng, 53, a former IT project manager at LAUSD, and Gowtham Sampath, 54, who operates a technology company from Texas, have reportedly been involved in a long-running “pay-to-play” scheme that directed significant school funding to Sampath’s firm. The Los Angeles County District Attorney’s Office provided this information.
“This case is a clear violation of public trust, where funds meant for students have been diverted for personal gain,” Hockman stated. He emphasized the seriousness of the situation, highlighting how a vendor allegedly collaborated with LAUSD project managers to create a multi-year, multi-contract arrangement that drained millions from schools.
Hockman further noted: “We will take firm action against any public officials selling their duties or contractors misusing the system for personal enrichment.” He assured that both would face full accountability.
According to the district attorney’s office, Peng, who was employed as a technology project manager from 2018 to 2022, is accused of unfairly assisting in awarding contracts to Sampath’s company, Innive, particularly for the district’s My Integrated Student Information System, MiSiS. The overall worth of these contracts exceeded $22 million. Furthermore, Sampath is alleged to have laundered more than $3 million by routing it back to Peng via intermediaries.
MiSiS is understood to be a centralized digital platform managing student data from early education through graduation, covering areas such as attendance, grades, registrations, schedules, and health records.
Prosecutors indicated that Peng stepped down from his role in late 2022 after search warrants were executed at his home and workplace in regard to the investigation.
Currently, Sampath and Innive hold various government contracts across California and beyond.
Messages exchanged between the two defendants purportedly revealed conversations about deleting communications, securing contracts, and transferring payments.
There is now an arrest warrant out for Peng, along with an extradition warrant for Sampath.
If found guilty of the charges, each could face up to seven years in county jail, as stated by the District Attorney’s Office.
