LA United School District scandal leads to charges as $22M scheme allegedly drained funds meant for students
A former Los Angeles Unified School District (LAUSD) IT employee and a tech company owner are facing felony charges in what prosecutors describe as one of the "largest" alleged money laundering schemes in the district's history.
Hong "Grace" Peng, a former LAUSD technical project manager, and Gautham Sampath, owner of the tech firm Innive, are accused of orchestrating a years-long "pay-to-play" scheme that allegedly steered more than $22 million in school district contracts to Sampath’s company.
"This case involves a blatant abuse of public trust — funneling taxpayer dollars intended for students into personal coffers," Los Angeles County District Attorney Nathan Hochman said in a statement.
"This vendor, working with an LAUSD project manager, allegedly carried out a multi-year, multi-contract pay-to-play arrangement that siphoned millions of dollars from our schools."
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According to prosecutors, Peng played a role in awarding contracts tied to LAUSD’s My Integrated Student Information System (MiSiS) between 2018 and 2022.
Authorities allege those contracts — totaling $22 million — were largely directed to Innive.
Investigators say Sampath then funneled more than $3 million back to Peng through intermediaries.
Prosecutors say messages between the two show discussions about deleting chats, securing contracts and moving money.
Peng, a Pasadena resident, was charged with felony counts of money laundering and illegally holding a financial interest in government contracts.
Sampath, of Flower Mound, Texas, faces similar charges, along with an additional count of aiding and abetting a public official.
An arrest warrant has been issued for Peng, while Sampath faces extradition to California. Court dates have not yet been set.
Peng resigned from LAUSD in late 2022 after investigators executed search warrants at her home and workplace.
Authorities say Sampath and his company continue to hold government contracts in California and nationwide.
If convicted, both defendants could face up to seven years in county jail.
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"We will not tolerate public officials who sell out their responsibilities or contractors who line their pockets by gaming the system," Hochman added. "Both will be held fully accountable."
In a statement, LAUSD said it was aware of the charges against Peng.
"LAUSD is committed to full compliance with all applicable laws, and we expect our employees and business partners to comply with the highest standards of ethics and integrity," the school district said in a statement. "The district will continue to cooperate fully with relevant authorities."
Innive did not immediately respond to Fox News Digital's request for comment.