LA United School District Engulfed in $22 Million Fraud Scandal
“This case involves a blatant abuse of public trust — funneling taxpayer dollars intended for students into personal coffers”
Just another story about massive fraud in another blue state. Nothing to see here.
FOX News reports:
LA United School District scandal leads to charges as $22M scheme allegedly drained funds meant for students
A former Los Angeles Unified School District (LAUSD) IT employee and a tech company owner are facing felony charges in what prosecutors describe as one of the “largest” alleged money laundering schemes in the district’s history.
Hong “Grace” Peng, a former LAUSD technical project manager, and Gautham Sampath, owner of the tech firm Innive, are accused of orchestrating a years-long “pay-to-play” scheme that allegedly steered more than $22 million in school district contracts to Sampath’s company.
“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 said in a statement.
“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.”
According to prosecutors, Peng played a role in awarding contracts tied to LAUSD’s My Integrated Student Information System (MiSiS) between 2018 and 2022.
Authorities allege those contracts — totaling $22 million — were largely directed to Innive.
Investigators say Sampath then funneled more than $3 million back to Peng through intermediaries.
Prosecutors say messages between the two show discussions about deleting chats, securing contracts and moving money.
Peng, a Pasadena resident, was charged with felony counts of money laundering and illegally holding a financial interest in government contracts.
Sampath, of Flower Mound, Texas, faces similar charges, along with an additional count of aiding and abetting a public official.
An arrest warrant has been issued for Peng, while Sampath faces extradition to California. Court dates have not yet been set.
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Comments
Fox is calling the scheme money laundering.
However, it is not.
Money laundering is the process that illegally source money is deposited in a manner, so it appears legal. Example: drug money deposited into a cash business (restaurant or movie theater.) The money is reported on the tax returns, which makes it appear legal.
What these perps participated in a classic kickback scheme.
I’m so old, I remember when police reporters knew stuff about police procedure, crime reporters knew stuff about varieties of crime, automotive reporters knew how to tune their carburetors, and so on.
I agree. When words are mistakenly (or deliberately) substituted, I make an effort to call it out for clarification and precision. And when someone gets aggitated at this practice, it exposes them as being one of those who is doing it deliberately.
On my local 10 block stretch of Hawthorne Ave in Portland there are 5 or so businesses whose sole purpose is to launder money. And I’m not even including all of the new food-carts that have sprung up. They are easy to spot, as they simply do not generate a cash flow to sustain them. My favorite is a shop that I have only seen customers in twice. More than likely their accounts will show just enough cash flow to pay rent (I suspect the source of cash is the same as the owner of the property, so they are essentially paying their mortgage as rent) and the person who sits at the counter is likely a family member. The secret is adjusting the numbers so that the absolute minimum amount of taxes/fees need to be paid. The person behind the counter likely makes just enough money to pay $5 in State tax and $10 in Federal. And I suspect they are paying the same rent as the mochahut where I am sitting, that is running 60 or more customers an hour for 14hrs a day. Ever since Breaking Bad, I look at a business and ask myself whether it can actually operate or not based on cash flow.
What likely happened here is that the person receiving the kickbacks did a piss poor job of laundering that money. or displayed a lifestyle that couldn’t be explained by a W2. because we all know that Tony Soprano’s income came solely from his W2 as a waste management consultant.
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