A former Los Angeles Unified School District IT employee and the owner of a technology vendor company are facing felony charges for allegedly funneling more than $22 million in district contracts through a years-long pay-to-play scheme that the Los Angeles County District Attorney calls the largest alleged money laundering operation in the district's history.
Breitbart reported that Hong "Grace" Peng, 53, a former technical project manager for LAUSD, and Gautham Sampath, 54, the owner of technology company Innive, stand accused of orchestrating the arrangement between 2018 and 2022.
Sampath is further accused of routing and laundering over $3 million back to Peng through various intermediaries. An arrest warrant has been issued for Peng, who lives in Pasadena. An extradition warrant has been issued for Sampath, who lives in Flower Mound, Texas.
If convicted, each defendant faces up to seven years in county jail.
Los Angeles County District Attorney Nathan J. Hochman announced the charges Thursday and did not mince words about what the scheme represented:
"This case involves a blatant abuse of public trust — funneling taxpayer dollars intended for students into personal coffers."
The contracts at the center of the case were primarily related to LAUSD's My Integrated Student Information System, known as MiSiS, a platform that tracks student data from pre-K to graduation.
Peng, in her role as a technical project manager, is accused of illegally participating in the awarding of those contracts to Sampath's company Innive, steering more than $22 million in district funds to the vendor over a four-year span.
Hochman laid out the alleged mechanics plainly:
"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."
Prosecutors say they have messages between the two defendants that reveal discussions about deleting chats, securing contracts, and moving funds. The consciousness-of-guilt details write themselves.
The scheme apparently began unraveling in late 2022, when a search warrant related to the investigation was served at Peng's home and her workplace.
She resigned from her job shortly after. That gap between late 2022 and the charges announced this week suggests a lengthy and deliberate investigation, one that prosecutors appear confident enough in to bring felony charges and seek extradition across state lines.
Perhaps the most troubling detail buried in this case: Sampath and his company Innive currently have government contracts throughout California and across the country. The DA's office did not specify which agencies or how much money is involved, but the implication is clear.
If this is how Innive allegedly did business with the second-largest school district in America, the question of what's happening with its other government contracts practically asks itself.
This case lands in a familiar and infuriating pattern for anyone who has watched public education budgets balloon while classroom outcomes stagnate. LAUSD is not a cash-strapped rural district scraping by on thin margins.
It is a behemoth that spends tens of billions of taxpayer dollars, and yet the internal controls apparently allowed a single project manager to steer $22 million in contracts to a single vendor over four years while receiving millions in kickbacks.
Every time a school board asks for another bond measure, every time a teachers' union demands more funding, every time a superintendent insists the problem is resources, remember that $22 million allegedly walked out the door in Los Angeles through an IT procurement scheme.
Not through a sophisticated offshore network. Through a project manager and a vendor exchanging messages about how to delete their chats.
The education establishment's perpetual answer to every problem is more money. But money without accountability is just opportunity for the Hong Pengs and Gautham Sampaths of the world. You don't solve corruption by increasing the pool of cash available to be stolen.
Hochman struck the right tone in his statement:
"We will not tolerate public officials who sell out their responsibilities or contractors who line their pockets by gaming the system. Both will be held fully accountable."
That's the right posture. Whether it produces real consequences remains to be seen. Seven years in county jail is the ceiling, and anyone familiar with how white-collar cases move through the system in California knows that ceilings and outcomes are rarely the same thing.
The charges are a start. But the harder question is structural. How did LAUSD's procurement process allow this for four years? Who reviewed these contracts? Who signed off? A project manager does not award $22 million in contracts alone.
Somewhere in that bureaucracy, there were approvals, oversight layers, and compliance checkboxes that either failed or never existed in the first place.
Twenty-two million dollars. Intended for students. Allegedly pocketed by the people entrusted to spend it on their behalf. That's not a budgeting problem. That's a governance failure, and no amount of new funding fixes a system that can't keep its own employees from looting it.