LA school district ex-employee and vendor accused of $22 million taxpayer pay-to-play scheme

A former Los Angeles Unified School District employee and the owner of a technology vendor were charged Thursday for their alleged involvement in a $22 million kickback scheme that funneled taxpayer funds away from classrooms and into their own pockets.

The Los Angeles County District Attorney’s Office announced charges against Hong “Grace” Peng, 53, of Pasadena, and Gautham Sampath, 53, of Flower Mound, Texas.

‘This case involves a blatant abuse of public trust — funneling taxpayer dollars intended for students into personal coffers.’

Peng previously worked as a technical project manager for LAUSD between 2018 and 2022. She was accused of illegally participating in the awarding of contracts. Peng allegedly unlawfully issued contracts totaling over $22 million to a company owned by Sampath.

Sampath was accused of laundering over $3 million to Peng.

Peng resigned from her position with LAUSD following a late-2022 search warrant related to an investigation into alleged illegal activity. Peng was charged with money laundering and one felony count of having a financial interest in a contract or purchase made in an official capacity.

Sampath was charged with 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.

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If convicted on all charges, they each face up to seven years in jail.

Authorities issued an arrest warrant for Peng and an extradition warrant for Sampath.

“Between 2018 and 2022, Peng was involved in signing, approving, or recommending over $22 million in funding from LAUSD to Innive through Change Orders, Work Orders, Invoices, and Contract recommendations,” the felony complaint read. “Between 2017 and 2023, Innive received over $39 million in payments from LAUSD. Between 2018 and 2022, Peng received over $3 million in payments from Sampath, Sampath controlled companies, or Sampath connected third parties.”

The complaint claimed that Sampath sent texts to Peng in February 2018 instructing her to “delete all” of their messages.

“If anyone sees the text about these internal things it will be a prb,” Sampath allegedly wrote.

In June 2018, he allegedly wrote to Peng, “What r the other opportunities in Lausd. That we can exploit. Any other area.”

According to the complaint, Peng responded by telling Sampath that there were “a lot” of proposal requests from the district.

“This case involves a blatant abuse of public trust — funneling taxpayer dollars intended for students into personal coffers,” Los Angeles County District Attorney Nathan Hochman stated. “This vendor, working with an LAUSD project manager, allegedly carried out a multi-year, multi-contract pay-to-play arrangement that siphoned millions of dollars from our schools. We will not tolerate public officials who sell out their responsibilities or contractors who line their pockets by gaming the system. Both will be held fully accountable.”

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LAUSD released a statement in response to the charges.

“Los Angeles Unified is aware of the charges filed by the District Attorney’s office against an individual who worked for LAUSD as an information technology employee from 2018 to 2022. As recounted in the District Attorney’s Felony Complaint, this former employee was referred to the Office of the Inspector General for investigation in April 2022, as soon as an LAUSD supervisor learned of a potential conflict of interest. LAUSD Office of the Inspector General then notified the District Attorney’s office,” the district wrote.

“LAUSD is committed to full compliance with all applicable laws, and we expect our employees and business partners to comply with the highest standards of ethics and integrity. The District will continue to cooperate fully with relevant authorities,” the district continued. “We will not comment further on the specifics of the case while legal proceedings are ongoing.”

Sampath, Innive, and Peng did not respond to a request for comment.

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