LAUSD's $22M fraud scandal exposes largest money laundering case in district history
A former Los Angeles Unified School District (LAUSD) employee and a tech company owner face serious charges in what prosecutors call the largest money laundering case in the district's history. Hong 'Grace' Peng, an ex-IT worker, and Gautham Sampath, owner of Innive, are accused of diverting millions in public funds through fraudulent contracts. Between 2018 and 2022, Peng allegedly used her position to award contracts worth $22 million to Sampath's company. These contracts focused on the district's My Integrated Student Information System, a key digital platform for student records.
Prosecutors claim Peng then directed $3 million back to herself through Sampath's firm. Text messages between the two reportedly discussed ways to hide the money's origin. Both Peng and Sampath now face one felony count of money laundering and one felony count of having a financial interest in a contract. If convicted, each could receive up to seven years in county jail. An arrest warrant has been issued for Peng, while authorities seek Sampath's extradition. The case follows an investigation that uncovered no evidence of additional companies or specific regions being used to obscure the financial flows.
The charges mark the first time LAUSD has pursued a money laundering case of this scale. District Attorney Nathan Hochman described the scheme as unprecedented in the district's history. The outcome of the case will determine whether Peng and Sampath serve prison time for their alleged roles in the fraud.
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