The founder of a tech startup that created a chatbot for the Los Angeles Unified School District has been charged with fraud.
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Joanna Smith-Griffin was arrested in Raleigh, North Carolina on Tuesday and charged with securities fraud, wire fraud, and aggravated identity theft. The FBI claims she misrepresented the company’s finances, illegally collecting millions of dollars from investors since 2020.
The three charges combined carry a maximum sentence of over 40 years in prison, according to the Department of Justice.
Prosecutors allege that Smith-Griffin used some of the funds for a down payment on a house and to pay for her wedding.
Smith-Griffin’s startup AllHere created an AI chatbot for the LAUSD called “Ed,” which was unveiled in March and quietly shelved over the summer. The district spent about $3 million of its $6 million commitment to the company.
“The indictment and the allegations represent, if true, a disturbing and disappointing house of cards that deceived and victimized many across the country,” LAUSD Superintendent Alberto Carvalho told the L.A. Times.
Smith-Griffin, a Harvard graduate, appeared on the Forbes 30 Under 30 list for education in 2021.
AllHere is now under the control of a court-appointed bankruptcy trustee and all its employees have been laid off, according to prosecutors.
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