District attorney files felony charges against former LAUSD employee over $22M in IT contracts

The L.A. County District Attorney alleges a former Los Angeles Unified information technology employee illegally helped a tech company win more than $22 million in district contracts. Prosecutors say the case is “one of the largest money laundering schemes” in the district’s history.

According to the complaint, between 2018 and 2022 Hong “Grace” Peng worked in LAUSD’s IT department and participated in the approval and recommendation of over $22 million in payments to Innive Inc. for services primarily related to the district’s student data system. In the same time period, prosecutors allege Innive CEO Gautham Sampath paid Peng over $3 million.

“This is the type of evidence that you just shake your head, like you can’t believe it,” said District Attorney Nathan Hochman in a recorded statement about the case.

Hochman presented multiple text messages where Peng and Sampath discussed Innive’s contracts with the district. In one, Peng said Sampath was “lucky” she was on a selection committee. When he asked why, she responded "Because you have me...lol...I broke all law for you already lol."

Peng declined to comment when reached by LAist.

Michael Kraut, an attorney for Sampath, said his client had no knowledge of how the contract was awarded.

 "There's been no wrongdoing in terms of not producing, or theft of this money, or embezzling this money," Kraut said. "This is a case in which my client and his company produced exactly what they were contracted to do in the high tech field for LAUSD and the software."

Kraut said the $3 million was related to other "long-term contractual issues" with Peng and had "nothing to do" with the LAUSD contract.

"The DA's office is going to realize that they have made a mistake in this matter and jumped the gun and in fact, there is no criminal intent or actions by my client or his company," he said.

How did the alleged conduct come to light?

According to the complaint, the district first became aware of the alleged scheme in 2022, when an LAUSD IT employee attended a conference and learned from a former colleague of a possible connection between Peng and Sampath. The district employee alerted a supervisor, who alerted the district's inspector general.

A district spokesperson sent LAist a statement Thursday affirming that timeline and saying staff will continue to participate in the investigation “as appropriate.”

“We will not comment further on the specifics of the case while legal proceedings are ongoing,” the statement read.

What happens now?

Prosecutors charged Sampath with felony counts related to money laundering, “having a financial interest in a contract or purchase made in an official capacity” and “aiding and abetting a government official to have a financial interest in a contract or purchase” made in an official capacity. Peng faces two felony counts — one related to money laundering and the other with “having a financial interest in a contract or purchase made in an official capacity.”

The court issued warrants for Peng and Sampath’s arrests and bail was set at $500,000 for each.