LAUSD IT Employee Charged in $22M Contract Scheme

Hong "Grace" Peng, a former Los Angeles Unified School District (LAUSD) technical project manager, and Gautham Sampath, owner of the tech firm Innive, have been charged with felony counts of money laundering and illegally holding a financial interest in government contracts. According to prosecutors, the pair allegedly orchestrated a "pay-to-play" scheme that steered more than $22 million in school district contracts to Innive between 2018 and 2022.

The alleged scheme involved Peng awarding contracts primarily for LAUSD's My Integrated Student Information System (MiSiS) to Innive. In return, Sampath allegedly funneled over $3 million back to Peng through intermediaries. Los Angeles County District Attorney Nathan J. Hochman described the case as "a blatant abuse of public trust" and one of the largest kickback schemes in the nation's second-largest school system.

The investigation into the alleged fraud began after a district employee overheard one of the involved parties bragging about it at a professional conference. Text messages between Peng and Sampath, included in the criminal complaint, show discussions about deleting chats, securing contracts, and moving money. Peng allegedly texted Sampath that she deflected questions about why Innive was getting so much work compared to other companies.

The alleged fraud relates specifically to the awarding of the contract rather than the quality or completion of the work. An audit conducted by L.A. Unified in 2022 questioned about $20,000 in billing by Innive but did not appear to be related to the investigation.