Full Breakdown
LAUSD's $22 Million Money Laundering Scheme: Charges Against Hong Peng and Gautham Sampath
3/30/2026, 2:53:33 AM
Overview of the Allegations
Hong “Grace” Peng, a former information technology employee of the Los Angeles Unified School District (LAUSD), and Gautham Sampath, the owner of the Texas-based technology firm Innive, face serious felony charges in what prosecutors describe as one of the largest money laundering schemes in the district's history. The allegations involve the illegal steering of over $22 million in contracts to Innive, with Sampath allegedly routing more than $3 million back to Peng as kickbacks between 2018 and 2022.
Details of the Scheme
According to the Los Angeles County District Attorney Nathan Hochman, Peng utilized her position to award contracts primarily related to LAUSD's My Integrated Student Information System (MiSiS), which manages student records and enrollment. The criminal complaint indicates that Peng and Sampath engaged in a "pay-to-play" arrangement, where Peng allegedly manipulated the bidding process to favor Innive. Text messages between the two reveal discussions about deleting communications to avoid detection and strategies for concealing their actions.
In one exchange, Sampath asked, “What r the other opportunities in LAUSD that we can exploit?” to which Peng responded, “Yea, a lot of them.” Furthermore, Peng allegedly indicated her control over the bidding process by stating, “So I kicked out Procurement personnel before we gave the scores,” demonstrating a blatant disregard for ethical standards.
Legal Proceedings and Charges
Both Peng and Sampath have been charged with multiple felonies, including money laundering and having a financial interest in a public contract. Peng faces two felony counts, while Sampath faces four, including aiding and abetting a government official. If convicted, they could each face up to seven years in county jail. An arrest warrant has been issued for Peng, and Sampath is subject to extradition from Texas.
Official Statements and Responses
LAUSD has publicly acknowledged the charges against Peng, emphasizing its commitment to compliance with laws and ethical standards. The district stated, “We expect our employees and business partners to comply with the highest standards of ethics and integrity.” Hochman characterized the scheme as a “blatant abuse of public trust,” highlighting the misuse of taxpayer dollars intended for educational purposes.
Criticism and Defense
Sampath's attorney, Michael Kraut, contended that there was nothing inappropriate about his client's relationship with LAUSD, asserting that any payments to Peng were unrelated to the contracts. He claimed that Innive fulfilled its contractual obligations and that the allegations stemmed from the actions of Peng alone.
What's Next
The arraignment dates for Peng and Sampath have not yet been set, as the investigation continues. The District Attorney's office is actively seeking information from other organizations that may have contracts with Innive, indicating that the ramifications of this case could extend beyond the immediate charges.
Conclusion
The allegations against Hong Peng and Gautham Sampath underscore significant concerns regarding corruption and the misuse of public funds within LAUSD. As the case unfolds, it raises critical questions about oversight and accountability in the management of taxpayer resources intended for educational services.
