FBI Raids LAUSD Superintendent's Home in AI-Related Probe
Federal agents searched the home and office of Los Angeles Unified School District Superintendent Alberto Carvalho as part of an FBI investigation tied to the district's failed contract with AllHere, a now-defunct AI vendor. Sources familiar with the probe say the focus is on Carvalho, not the district, and centers on financial issues connected to the Ed chatbot deal. Search warrant affidavits remain sealed. As of now, no one has been charged.
What Triggered the Raids
LAUSD unveiled "Ed," an AI chatbot, in March 2024 with the promise of personalized support for students and families. The project never fully launched. AllHere, the Boston startup behind the tool, soon collapsed, laid off most staff by June, and later entered bankruptcy. Its founder, Joanna Smith-Griffin, was indicted on investor fraud charges months after the debut.
What Investigators Are Looking At
While the FBI has not disclosed details, the inquiry is tied to the failed Ed contract and related financial matters. Carvalho has remained silent publicly. The school board scheduled a closed-session meeting focused on the superintendent's employment. Neither Carvalho nor Florida-based consultant Debra Kerr, who worked on the deal and is listed as a creditor in AllHere's bankruptcy, has been charged.
The Company Behind Ed
AllHere had limited AI experience. Its core product automated attendance and outreach messages rather than true AI-driven tutoring or guidance. The company also did business with Miami-Dade schools and later defaulted on that contract, records show. In the Smith-Griffin case, federal court hearings in New York have been repeatedly delayed while parties discuss a possible resolution.
Politics, Perception, and Caution
The Trump administration has emphasized fraud enforcement, and critics have alleged it targets perceived political opponents. That said, the criminal case against Smith-Griffin began before Trump took office. A well-known defense attorney cautioned that raids do not equal guilt, while a former federal prosecutor noted that searching a superintendent's home usually signals a serious, planned step in an investigation. Both points can be true at once.
The Carvalho-Kerr Connection
Carvalho and Kerr worked in the same education circles during his Miami-Dade tenure. Bankruptcy filings show Kerr claims AllHere owes her $630,000-about 10% of LAUSD's contract value, a commission that industry insiders say can be typical for dealmakers. Again, neither has been charged.
LAUSD's Position and the Contract Math
District officials say LAUSD paid roughly $3 million of the $6 million in awarded work and received deliverables tied to that payment. They characterize the district as a victim because key services were never fully delivered. Carvalho has said he did not influence vendor selection, which occurred through a competitive panel review. The plan also included co-developing and licensing the product to other districts, sharing potential profits between LAUSD and AllHere.
What This Means for District Leaders
Big ideas are cheap. Execution, accountability, and vendor viability are where districts win or lose. If you oversee technology, procurement, or school operations, here are practical steps to protect your community and budget:
- Separate vision from vendor capability. Ask for working demos in production settings, not slideware.
- Stage-gate payments. Tie funding to verified milestones, security reviews, and classroom outcomes.
- Vet financial health. Require audited financials, cash runway, and customer references with contactable districts.
- Tighten conflict-of-interest controls. Mandate disclosures from staff and vendors; document all external relationships.
- Start with small, time-bound pilots. Predefine success metrics and a clear off-ramp if results fall short.
- Lock down student data. Require a data protection agreement, clear data ownership, deletion timelines, and compliance with FERPA/COPPA. Independent security attestations help.
- Avoid revenue-sharing structures that blur incentives. If used, erect strict firewalls in evaluation and oversight.
- Include clawbacks, escrow, and IP access for critical components if a vendor fails or is acquired.
- Document everything. Centralize communications, decisions, and approvals for auditability.
- Prepare a crisis playbook. If a tool fails mid-year, have backup plans and a parent/student communication script ready.
What to Watch Next
Key signals: any movement from the FBI or prosecutors, outcomes from LAUSD's board regarding Carvalho's status, and further filings in the AllHere bankruptcy and Smith-Griffin's criminal case. Districts should use this moment to stress-test their AI procurement and governance. The cost of a misstep isn't just dollars-it's trust with families, staff, and students.
Resources for School Teams
For practical implementation guidance, see AI for Education and leadership-focused training in the AI Learning Path for School Principals.
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