LAUSD Sues to Recover $22 Million in Alleged IT Kickback Scheme
Updated
Updated · Los Angeles Times · May 12
LAUSD Sues to Recover $22 Million in Alleged IT Kickback Scheme
2 articles · Updated · Los Angeles Times · May 12
$22 million is what Los Angeles Unified says was tainted by fraud in contracts steered to Texas-based Innive from 2018 to 2022, and the district is seeking that amount back plus possible punitive damages.
The suit alleges former IT manager Hong "Grace" Peng helped Innive win and expand work by inflating bid scores, approving change orders and timesheets, and concealing conflicts while receiving more than $3 million in kickbacks.
Court filings say Peng and CEO Gautham Sampath routed money through shell companies including DDManta and Hexalytics; prosecutors cited texts such as Peng saying she had "broken the law" for him and Sampath urging her to delete chats.
Peng and Sampath, both 53, were criminally charged in March, have pleaded not guilty, and deny wrongdoing; District Attorney Nathan Hochman called it the largest money-laundering operation in LAUSD history.
The contracts centered on LAUSD's student information system, and the district argues it can recover payments even if services were delivered because the work was allegedly obtained and performed illegally.
What systemic flaws allowed a manager to run a $22 million fraud scheme in LAUSD for four years undetected?
As LAUSD battles multiple corruption scandals, what will it take to finally safeguard funds meant for students?
With texts like 'I broke all law for you,' what does this case reveal about the digital trail in modern fraud?
LAUSD’s $22 Million Kickback Scandal: Uncovering the District’s Largest Money-Laundering Operation and Its Fallout
Overview
The Los Angeles Unified School District is facing a major scandal as former employee Hong “Grace” Peng has been charged with directing over $22 million in district contracts to the technology company Innive between 2018 and 2022. Prosecutors allege that Peng received more than $3 million in illegal kickbacks from Innive, led by Gautham Sampath. While Innive secured about $39 million in contracts overall, a civil lawsuit claims $22 million of these were tainted by illegal conduct. Legal actions are ongoing, and the case has raised serious concerns about oversight and accountability within the district.