“I’ve broken every law lol,” an LA Unified employee allegedly texted another conspirator amid what prosecutors say is the largest money laundering scheme in the school district’s history.
Hong “Grace” Peng, 56, of Pasadena, is accused of using her role as an IT employee at the Los Angeles Unified School District to ensure that more than $22 million in contracts were awarded to a technology company owned by Gautham Sampath, 56, of Flower Mound, Texas. He is accused of returning more than $3 million in taxpayer money to Peng.
This is not the only scandal rocking the nation’s second largest school district.
Last month, Supt. Alberto Carvalho has been placed on paid leave after the FBI raided his home and office in connection with an investigation into an AI chatbot company that previously had a contract with the county accused of fraud. He denied that he made a mistake and asked to be reinstated.
Peng and Sampath’s alleged plan, which runs between 2018 and 2022, predates Carvalho’s time in the region.
He assumed leadership in February 2022. Allegations of fraud surfaced in April 2022, and Peng resigned later that year after search warrants related to the investigation were obtained from his home and work, prosecutors said.
Peng, a former technical project manager in the district, is accused of working to manage contracts for Innive, Sampath’s company, prosecutors said. The contracts primarily relate to the district’s My Integrated Student Information System, which manages student records, enrollment, attendance, grades and schedules.
On Thursday, LA County Dist. He said. Nathan Hochman shared a video where he read aloud the alleged text messages exchanged between Peng and Sampath included in the charging documents filed against them.
In June 2018, Sampath allegedly sent a message to Peng asking, “What other opportunities at Lausd. Can we take. Anywhere else.”
He replied, “You mean all the RFPs” — referring to requests for proposals for companies seeking contracts with the district — and later texted him, “You’re in luck. I’m on the selection committee,” prosecutors said.
Their documents appear to be about money laundering techniques, according to prosecutors.
Peng notes that the county employee is “concerned” with the amount of money transferred to Sampath, noting, “We need to come up with a lot of companies… at least 3-4 to get the money out… It’s easy to track without being aware of how we’re doing it,” prosecutors said.
He responded by asking if they should start another company with a different name, noting that he could set up a company in Hong Kong, Singapore or China, prosecutors said.
“You can’t fix these things,” Hochman said. The district attorney said the messages would help prove “that intent to defraud, that intent to launder money, that intent to violate our conflict of interest laws.”
Peng and Sampath are charged with one count of money laundering and one count of having a financial interest in a lawful contract or purchase. Sampath is charged with aiding and abetting a public official to have a financial interest in such a contract.
A warrant has been issued for Peng’s arrest, and a warrant for his extradition to Sampath has been issued. Their court appearance date has not been set. If convicted as charged, each person faces up to seven years in prison.
“This case involves a flagrant abuse of the public trust – diverting taxpayer dollars intended for students to put in their own wallets,” Hochman said in a statement. “This vendor, working with the LAUSD project manager, allegedly orchestrated a multi-year, multi-contract pay-to-play scheme that cost our schools millions of dollars.”
