LAUSD staffer charged in massive $22M money laundering scheme

A Los Angeles Unified School District staffer is facing felony charges over a $22 million kickback scheme in the latest black eye for the scandal-scarred district.

Former LAUSD technical project manager Hong “Grace” Peng is charged with two felony counts for money laundering and for having a financial interest in an official contract, over her alleged role in the scam.

Los Angeles County District Attorney Nathan Hochman says Peng conspired with a Texas technology contractor named Gautham Sampath in a pay-to-play scheme where Peng fed more than $22 million in contracts to a company owned by Sampath from 2018-2022.

Sampath then routed and laundered more than $3 million in kickbacks, back to Peng through various intermediaries, Hochman alleges.

Sampath faces three felony charges for his role in the conspiracy, including money laundering, having a financial interest in an official contract, and abetting a government official to have a financial interest in an official contract.

“This case involves a blatant abuse of public trust — funneling taxpayer dollars intended for students into personal coffers,” said Hochman.

“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,” Hochman added.

An arrest warrant has been issued for Peng and an extradition warrant has been issued for Sampath, according to Hochman’s office.

Peng resigned from LAUSD after a search warrant related to the investigation was served at her home and her workplace in late 2022.

Sampath and his company Innive currently have government contracts throughout California and across the country, Hochman said.

If convicted as charged, each defendant faces up to seven years in county jail.

The charges leveled against Peng are just the latest embarrassment for the nation’s second-largest district in recent weeks.

LAUSD Superintendent Alberto Carvalho last month was removed from his post after the FBI carried out a stunning series of raids on his home and office over his dealings with an AI tech company that defrauded investors.

Carvalho has said he is innocent.

The district is also facing a strike by teachers who want higher pay.  The strike is meant to kick off next month if LA Unified and its workforce can’t make a deal.

In a statement on the criminal charges facing Peng, a rep for the district said LA Unified “will continue to participate fully with law enforcement as appropriate.”

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