A tech vendor — who is charged along with a former schools information technology employee in what prosecutors called one of the largest money laundering schemes in Los Angeles Unified School District history — pleaded not guilty on Friday to felony charges.
Gautham Sampath, 53, of Flower Mound, Texas is charged with one felony count each of 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, according to the Los Angeles County District Attorney’s Office.
The ex-LAUSD employee, Hong “Grace” Peng, 53, of Pasadena is charged with one felony count each of money laundering and having a financial interest in a contract or purchase made in an official capacity. She pleaded not guilty April 3.
The two are due back at the downtown Los Angeles courthouse June 10. A date is scheduled to be set then for a hearing to determine if there is sufficient evidence to allow the case to proceed to trial.
In a statement last month announcing the charges, District Attorney Nathan Hochman said, “This case involves a blatant abuse of public trust —funneling taxpayer dollars intended for students into personal coffers. 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.”
Prosecutors allege that between 2018 and 2022, Peng, who served as a technical project manager for LAUSD, illegally participated in the awarding of contracts primarily related to the district’s My Integrated Student Information System — known as MiSiS — to Innive, a company owned by Sampath. The contracts totaled more than $22 million.
Sampath is further accused of routing and laundering over $3 million back to Peng through various intermediaries, Hochman said.
Peng resigned from LAUSD after a search warrant related to the investigation was served at her home and her workplace in late 2022. Sampath and his company Innive currently have government contracts throughout California and across the country, prosecutors said.
If convicted as charged, each defendant would face up to seven years in county jail.
The LAUSD’s Office of Inspector General and the District Attorney’s Bureau of Investigation have actively been working on the case since the allegations came to light in April 2022, according to the District Attorney’s Office.
Last Friday, the Los Angeles Unified School District filed a civil lawsuit today against Peng and Sampath.
The Los Angeles County Superior Court complaint alleges that Peng violated state conflict-of-interest laws by secretly maintaining a financial and personal relationship with Sampath — the chief executive officer of Innive Inc. — while participating in contracting decisions that benefited the company.
“Los Angeles Unified 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,” Acting Superintendent Andrés E. Chait said. “When those standards are violated, we will take decisive action to hold responsible parties accountable and to recover taxpayer dollars.”
The lawsuit alleges that Peng took part in procurements, evaluations and approvals amounting to millions of dollars in district contracts, work orders and change orders. Peng also allegedly concealed financial ties and payments connected to the contractor’s business with the district through various intermediaries.
The complaint also contends that the contractor failed to disclose these conflicts despite clear contractual obligations and ethical requirements, allowing the firm’s leadership to benefit from the alleged misconduct.