The FBI raided the home and office of Los Angeles Unified School District Superintendent Alberto Carvalho on Wednesday amid allegations of conflicting interests with AllHere, an AI education startup exposed for committing fraud.
The superintendent was placed on administrative leave Friday after a unanimous vote by the school board, according to a press release by LAUSD.
“Today’s action is aimed at fulfilling our promise to students and families to provide an excellent public education without distraction,” said Board President Scott M. Schmerelson about Carvalho’s paid administrative leave.
As superintendent of the second-largest school district in the nation, Carvalho built a reputation of charisma and adaptability, according to an article by the LA Times. The raid on Carvalho’s home and office came as a result of his connections to AllHere, an AI startup creating software to increase classroom attendance and engagement. LAUSD was the company’s largest client, securing a $6 million contract with the district in July 2023, according to EdSource.
AllHere’s technology included an automated system of individualized messages for students and parents. Through “Ed,” which was announced in late 2023, LAUSD planned to integrate the system to inform students and families of grades, test results and attendance. AllHere collapsed in June 2024 as investor doubts crept in and false information was given to conceal the truth, according to Los Angeles Daily News.
According to a press release from the U.S. Attorney’s Office, AllHere’s founder Joanna Smith-Griffin allegedly misrepresented its revenue and connections with prominent U.S. school districts to potential investors, using the illegally obtained funds to put a down payment on her home and pay for her wedding. The federal office alleged Smith-Griffin inflated the company’s revenue from $11,000 to $6.8 million and falsely listed school districts as customers, according to the LA Times.
In August 2024, the company filed for bankruptcy in Delaware, according to court documents. Debra Kerr, an AllHere contractor with ties to Carvalho, also had her home searched as part of the investigation last week. In September 2024, Kerr said she assisted in closing AllHere’s deal with LAUSD at a bankruptcy hearing. Carvalho, however, has denied involvement in the decision.
While the investigation involving Carvalho became public last week, the investigation began over a year ago with a tip from New York prosecutors, according to the LA Times. The prosecutors turned their attention to Carvalho while examining a fraud case at an AI firm within the school district.
LAUSD hired an external law firm to conduct an internal investigation of Carvalho’s private dealings with the company, but found no criminal wrongdoing on his part. In a statement to Annenberg Media, the FBI department of Public Affairs confirmed they executed federal search warrants. However, as the affidavits supporting the warrants are under seal, the department is prohibited from providing further comment on the investigation.
The LAUSD school board met Monday in a closed board meeting to discuss the ongoing investigation of Carvalho. Last week, the board appointed Andres Chait as acting superintendent.
“Our focus remains clear: to ensure stability, continuity, and strong leadership for our students, families, and employees,” Chait said.