Hong "Grace" Peng, 56, of Pasadena, is accused of using her role as an information technology employee at the Los Angeles Unified School District to ensure that more than $22 million in contracts was awarded to a tech company owned by Gautham Sampath, 56, of Flower Mound, Texas. He is accused of then funneling more than $3 million in taxpayer funds back to Peng.
This isn't the only scandal shaking up the nation's second-largest school district.
Last month, Supt. Alberto Carvalho was placed on paid leave after the FBI raided his home and office in connection with an investigation into an artificial intelligence chatbot company previously contracted with the district that is accused of fraud. He has denied any wrongdoing and asked to be returned to his position.
Peng and Sampath's alleged scheme, which was carried out between 2018 and 2022, largely predates Carvalho's time at the district. He assumed his leadership role in February 2022.
The district said the former employee was referred to its Office of the Inspector General for investigation in April 2022 after a supervisor learned of a potential conflict of interest. The inspector general then notified the district attorney's office and Peng resigned later that year after a search warrant related to the investigation was served at her home and workplace, according to the district and Los Angeles County prosecutors.
In a statement, LAUSD said that it is aware of the charges filed against a former employee, is committed to full compliance with all laws, and expects employees and business partners to "comply with the highest standards of ethics and integrity."
"The district will continue to cooperate fully with relevant authorities," the statement said.
Peng, who previously served as a technical project manager at the district, is accused of illegally steering contracts to Innive, a company owned by Sampath, prosecutors said. The contracts primarily related to the district's My Integrated Student Information System, which manages student records, enrollment, attendance, grades and schedules.
On Thursday, L.A. County Dist. Atty. Nathan Hochman shared a video in which he read aloud alleged text messages exchanged between Peng and Sampath that are included in the charging documents filed against them.
In June 2018, Sampath allegedly texted Peng asking, "What r the other opportunities in Lausd. That we can exploit. Any other area."
She responded, "You mean all the RFPs" — referencing requests for proposals from companies seeking contracts with the district — later texting him, "You're so lucky. I'm on the selection committee," prosecutors say.
Their texts appear to discuss methods to launder the money, according to prosecutors.
Peng notes that a district employee has "apprehensions" with so much money being channeled to Sampath, noting, "We need to come up with lot of companies... at least 3-4 to take out the money... Easy to track unless we are careful in how we do it," prosecutors allege.
He responds by asking if they should start another company under a different name, noting that he can set up a company in Hong Kong, Singapore or China, prosecutors say.
"You can't make this stuff up," Hochman said. The district attorney said the text messages would help prove "that intent to defraud, that intent to commit money laundering, this intent to violate our conflict-of-interest laws."
Peng and Sampath are each charged with one felony count of money laundering and one felony count of having a financial interest in a contract or purchase made in an official capacity. Sampath is additionally charged with aiding and abetting a public official to have a financial interest in such a contract.
An arrest warrant has been issued for Peng, and an extradition warrant has been issued for Sampath. Their arraignment date has not yet been set. If convicted as charged, they each face up to seven years in county jail.
"This case involves a blatant abuse of public trust — funneling taxpayer dollars intended for students into personal coffers," Hochman said in a statement. "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."
©2026 Los Angeles Times. Distributed by Tribune Content Agency, LLC.
