“A disturbing and disappointing house of cards that deceived and victimized many across the country.”
AllFake
After duping the Los Angeles school system into giving her gobs of money, the founder of an AI ed tech firm allegedly spent a lot of it on herself.
As the LA Times reports, 33-year-old Joanna Smith-Griffin, the founder of an AI startup called AllHere, has been charged by federal prosecutors with identity theft and multiple counts of fraud after her alleged web of lies regarding her company’s sketchy wares came tumbling down.
Earlier this year, the same newspaper reported that after being contracted to build out a chatbot connecting families with information from the Los Angeles Unified School District, AllHere filed for bankruptcy despite tens of millions of dollars in public and private investment.
Now, the reason why seems to be emerging, per the allegations: that the founder’s repeated lies about the company’s worth, and dips into its investments for her own personal gain, led it to ruin.
Double Dipping
Prosecutors maintain in their indictment against Smith-Griffin that the founder of the Boston-based company inflated AllHere’s worth to attract investors, claiming that she had raised millions for its bespoke educational chatbot tech when in reality the firm had far less in its coffers.
According to the indictment, the founder also allegedly used some of the tens of millions she raised from private and public investors to put a down payment on a house in North Carolina and fund her own lavish wedding.
Aside from outside investments, the firm was contracted with the LAUSD, the nation’s second largest-school system, for $6 million. According to school officials who spoke to the LA Times, the district only paid out about half — or $3 million — of that contract to AllHere ahead of its collapse.
Ed Tech
Launched in March, AllHere’s chatbot for the LAUSD, named “Ed,” was meant to be a part of students’ individualized toolkits. Just a few months after its splashy rollout, however, the school district quietly took Ed offline — and soon, the company that made it was sinking as well.
“We can obviously point the finger at companies, especially startups, that are pressured to overpromise and… generally underdeliver,” University of Southern California AI expert Stephen Aguilar told the LA Times after Ed went dark. “Ultimately, the responsibility rests with the school district.”
Now, the superintendent of the LAUSD is condemning Smith-Griffin and what prosecutors called a “deliberate and calculated scheme.”
“The indictment and the allegations represent, if true, a disturbing and disappointing house of cards that deceived and victimized many across the country,” superintendent Alberto Carvalho told the LA Times following the recent charges. “We will continue to assert and protect our rights.”
Those rights, it seems, include the ability to revive the Ed chatbot at will — and as Carvalho told the newspaper, the LAUSD hasn’t given up hope that it will be able to do so.
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