A “largest” scandal ever seen, involving the Los Angeles Unified School District, has resulted in felony charges tied to an alleged $22 million scheme that authorities say diverted funds intended for students.
Prosecutors allege that a former district IT staffer and a private tech executive orchestrated what is being described as one of the largest suspected money-laundering operations in the district’s history. Hong “Grace” Peng, who previously worked as a technical project manager for LAUSD, and Gautham Sampath, who owns the tech company Innive, are accused of running a long-term “pay-to-play” arrangement that steered millions in school contracts to Sampath’s firm, reports Fox News.
“This case involves a blatant abuse of public trust — funneling taxpayer dollars intended for students into personal coffers,” said Nathan Hochman 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.”
According to investigators, Peng was involved in awarding contracts connected to the district’s My Integrated Student Information System (MiSiS) between 2018 and 2022. Authorities claim those agreements—worth roughly $22 million—were largely funneled to Innive.
Prosecutors further allege that Sampath routed more than $3 million back to Peng using intermediaries. Evidence cited by officials includes communications in which the pair allegedly discussed deleting messages, securing contracts, and transferring funds.
Peng, who lives in Pasadena, has been charged with felony money laundering and unlawfully holding a financial interest in government contracts. Sampath, a resident 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 is expected to be extradited to California. Court appearances for both individuals have not yet been scheduled.
Peng stepped down from her position with LAUSD in late 2022 after search warrants were carried out at her home and workplace. Officials also noted that Sampath and his company continue to maintain government contracts both in California and across the country.
If found guilty, each defendant could face a sentence of up to seven years in county jail.