A staff member from the Los Angeles Unified School District is now under felony charges due to their involvement in a $22 million kickback scandal, marking another troubling incident for the already embattled district.
Hong “Grace” Peng, previously a technical project manager with LAUSD, is facing two felony charges related to money laundering and possessing a financial interest in an official contract. These charges stem from her alleged involvement in the fraudulent scheme.
According to Los Angeles County District Attorney Nathan Hochman, Peng collaborated with Gautham Sampath, a technology contractor based in Texas, in a pay-to-play arrangement. Between 2018 and 2022, Peng allegedly directed over $22 million in contracts to Sampath’s company.
It is further alleged that Sampath funneled more than $3 million in kickbacks back to Peng, using a network of intermediaries to launder the money.
Sampath himself is facing three felony charges linked to the conspiracy, which include money laundering, holding a financial interest in an official contract, and enabling a government official to maintain such an interest.
“This case represents a serious breach of public trust, diverting taxpayer funds meant for students into personal gain,” Hochman stated.
“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.”
