FBI Raid of LAUSD Superintendent Reportedly A part of Securities Fraud Prosecution of AI Startup CEO

According to multiple news outlets, the FBI raid at Los Angeles Unified School District Superintendent Alberto Carvalho on Wednesday morning is related to the federal fraud and identity theft case pending against Joanna Smith-Griffin, a former education tech CEO whose startup built LAUSD’s failed AI chatbot, “Ed.”

According to the Miami Herald, the Miami-area home that was also raided on Wednesday was the home of Debra Kerr, an ed tech salesperson who reportedly has longtime ties to Carvalho. Kerr and her son worked for Smith-Griffin’s company, AllHere Education, and landed the $6 million contract with LAUSD for the firm in 2023.

MORE: FBI Raids Home, Office of LAUSD Superintendent Alberto Carvalho

It’s important to note that “Ed” was not an existing product that LAUSD simply contracted with AllHere to implement. AllHere’s main product was “a text messaging system that allows schools to inform families about weather events and other announcements”; for LAUSD AllHere was developing the chatbot from scratch.

The chatbot launched March 10, 2024, and Carvalho unplugged it on June 14 of that year amid AllHere’s financial collapse. The company filed for Chapter 7 bankruptcy in August 2024, and in filings Kerr claimed she was still owed $630,000.

Smith-Griffin was indicted for securities fraud, wire fraud, and aggravated identity theft in the Southern District of New York in November 2024:

Smith-Griffin, 33, misrepresented AllHere’s revenue and customer base to fraudulently raise almost $10 million in funds, according to the indictment. Once the company’s valuation had climbed, she sold some of her stake in it and spent hundreds of thousands of dollars on a down payment for a new home and on her wedding.

Smith-Griffin claimed to investors in 2021 that eight public school systems, including those in New York, Atlanta and Baltimore, were using AllHere’s technology. But according to prosecutors, only two of the eight districts — those in Boston and Prince George’s County, Maryland. — actually had contracts with the company.

In the few months that “Ed” was functional for LAUSD families, students’ personal information was misused, according to Chris Whiteley, who was AllHere’s senior director of software engineering.

He told district officials, its independent inspector general’s office and state education officials that the tool processed student records in ways that likely ran afoul of L.A. Unified’s own data privacy rules and put sensitive information at risk of getting hacked. None of the agencies ever responded, Whiteley told The 74.

Whiteley told officials the app included students’ personally identifiable information in all chatbot prompts, even in those where the data weren’t relevant. Prompts containing students’ personal information were also shared with other third-party companies unnecessarily, Whiteley alleges, and were processed on offshore servers. Seven out of eight Ed chatbot requests, he said, are sent to places like Japan, Sweden, the United Kingdom, France, Switzerland, Australia and Canada.

Carvalho was front-and-center in promoting AllHere and the AI chatbot, even giving a 20+ minute speech hyping it at Global Silicon Valley’s ASU+GSV conference in April, 2024.

One likely reason for Carvalho’s evangelism: royalties.

Under the contract between AllHere and LAUSD, which was obtained by The 74, the chatbot is the property of the school district, which was set to receive 2% in royalty payments from AllHere “should other school districts seek to use the tool to benefit their families and students.”

Since AllHere’s collapse, industry experts have wondered why the small company was selected for such an undertaking in a school district with more than 500,000 students and involving a rapidly-changing and unproven technology. It was a competitively-bid contract, but the price tag of $6.2 million to develop the tool and administer/maintain it for two years seems quite low and suggests that other factors might have been at play.

Editor’s Note: President Trump is fighting to dismantle the Department of Education and ensure America’s kids get the education they deserve.

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