LA Unified Superintendent Alberto Carvalho is allegedly being targeted by the feds over his connection to Joanna Smith-Griffin, a Forbes “30 Under 30” alum who is accused by the DOJ of defrauding investors of $10 million.
Carvalho, who’s led the nation’s second-largest school system since 2022, emerged Wednesday as the focus of an aggressive federal investigation with a trio of shocking FBI raids on the supe’s home, his office and the Miami home of Debra Kerr, a consultant who worked for Smith-Griffin.
Sources close to the joint FBI and DOJ investigation of Carvalho say the probe relates to Carvalho’s dealings with AllHere, an education tech startup Smith-Griffin founded at Harvard, which sold AI tools to US school districts that were purported to boost attendance and student engagement.
The bubbly Smith-Griffin took AllHere from the Harvard Innovation Labs to national prominence before her 2024 arrest at age 33.
“My goal over the next 12 months is a land grab,” she told Forbes in 2021.
Under Carvalho’s leadership, LAUSD in 2024 tapped Smith-Griffin’s company for a $6 million AI chatbot before the project was suddenly killed and the company collapsed.
Carvalho and Smith-Griffin appeared together at several events that year to hype the effort, which Carvalho said was a “game changer” and “unprecedented in American public education.”
Meanwhile, Smith-Griffin had falsely claimed her start-up chatbot had big clients, like New York City and Atlanta’s public school districts, and lied that the company had generated millions in revenue, when if fact it had only made thousands, prosecutors charge.
It all came crashing down when she was federally charged with a series of felonies later that year.
“Smith-Griffin orchestrated a deliberate and calculated scheme to deceive investors in AllHere Education, Inc., inflating the company’s financials to secure millions of dollars under false pretenses,” US Attorney Damian Williams said in announcing her indictment at the time.
“The law does not turn a blind eye to those who allegedly distort financial realities for personal gain,” he added.
Prosecutors say Smith-Griffin was able to obtain nearly $10 million from investors based on her lies, and sought an additional $35 million from a private equity investor, who ultimately decided not to invest.
The young CEO used some of the fraudulently obtained funds to put a down payment on her house in North Carolina and pay for her wedding, and tried to cover alleged crimes by creating fake email account which she used to send phony financial documents to her largest investor, prosecutors say.
She is charged with securities fraud, which carries a maximum sentence of 20 years in prison; wire fraud, which carries a maximum sentence of 20 years in prison; and aggravated identity theft, which carries a mandatory sentence of two years in prison.
Smith-Griffin has not been found guilty of any crimes and is reportedly in talks with prosecutors to settle her case.
Before her downfall, the precocious tech CEO rode a wave of AI hype into spotlight, appearing on a Forbes 30 Under 30 list in a red silk dress designed by Jonathan Cohen, where she claimed AllHere’s client base had ballooned to 2,000 schools in 15 states, who paid an annual subscription fee of $2 per student.
She also appeared on a 2024 “Female Founders” list published by Inc.
Carvalho was not named in Smith-Griffin’s indictment.
It’s unknown if her reported settlement with federal prosecutors has anything to do with the raids on Carvalho’s home and office, and that of Kerr, who as a consultant brokered the deal between AllHere and LA Unified.
Neither Carvalho nor Kerr have been charged with a crime. Both did not respond to calls for comment.
Smith-Griffin and her attorneys also did not respond to calls for comment.
FBI agents were on Wednesday spotted with rifles outside Carvalho’s spacious Palos Verdes home and taking documents and other items away the raid.
Nobody has been arrested or charged in the FBI’s investigation of Carvalho and he has remained in his $440,000-a-year post in charge of nearly 400,000 LA public school students.
Parents have called for Carvalho’s ouster, and the school board is conducting closed meetings on whether he should remain.