Charges Filed in Biggest Money Laundering Bust in Los Angeles School District History [WATCH]

Los Angeles County District Attorney Nathan Hochman announced charges against two individuals in what prosecutors describe as the largest money laundering operation in the history of the Los Angeles Unified School District, according to details released about the case.

The charges target Hong Grace Peng, an information technology employee with LAUSD, and Gotham Sampath, the owner of a company called Innive.

Authorities allege the two carried out a scheme spanning several years, during which insider information was exchanged in connection with contract bidding and payments.

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Hochman outlined the allegations and evidence during a public statement, describing the scope of the case and the communications that investigators say show coordination between the two defendants.

“We have announced charges in the largest money laundering operation in LAUSD history. That’s the Los Angeles Unified School District’s history. The allegations are against two individuals. One of them is an IT and Information Technology employee of the LAUSD. Her name is Hong Grace Peng, and what she did is she engaged in this money laundering scheme with an outside vendor. His name is Gotham Sampath, and his company is called Innive,” Hochman said.

The alleged scheme took place from 2018 through 2022. According to prosecutors, Peng provided internal information about LAUSD contract opportunities to Sampath, whose company then secured contracts with the district.

In return, authorities allege that Peng received payments totaling more than $3 million over the course of the operation.

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Hochman stated that investigators reviewed text messages and financial records that they say demonstrate how the alleged scheme operated and how the two individuals communicated about it.

“Now, when we went through the evidence in this case, and right now, it’s just allegations, but this is the evidence we intend to prove in court, to find them beyond a reasonable doubt, guilty. This is the type of evidence that you just shake your head like you can’t believe it,” Hochman said.

He then described a series of text exchanges that prosecutors say date back to February 2018, shortly after Peng was assigned to a role involving vendor contract selection.

According to Hochman, Peng had entered what is referred to as a “cone of silence,” a period during which she was required to avoid conflicts of interest while overseeing contract bids.

Despite that requirement, Hochman said messages between the two indicate ongoing communication regarding internal matters.

“So let me give you a couple examples of some of the text messages that went back and forth between these two individuals. I’ll take you all the way back to February of 2018 because this game, this scheme, ran from 2018 to 2022 so back on February 13, 2018 Miss paying enters into what’s called the cone of silence, which means she’s just been given as an IT employee, a contract that is now going to get given out to vendors to bid on,” Hochman said.

He continued by describing a message allegedly sent two days later by Sampath instructing Peng to delete their WhatsApp communications, warning that exposure of their discussions about internal matters would create problems.

Prosecutors allege that Peng provided internal approvals and information that enabled Innive to secure contracts, with financial payments flowing back over several years.

Hochman also described additional text exchanges from June 2018, in which the two allegedly discussed identifying further opportunities within LAUSD.

“So later in that year, June of 2018 Mr. Sand path text, Miss Pang and says, What are the other opportunities in LAUSD that we can exploit any other area? And she responds, you mean all the RFPs, those are requests for for proposals. And sand path tests back, yes, bench and bang. Paying. Miss paying. Responds, yeah, a lot of them. And he responds, we need to reach our goal of 25 from LAUSD itself,” Hochman said.

Further messages cited by Hochman include references to Peng’s position on a selection committee and statements prosecutors say show awareness of wrongdoing.

“Now, about a month later, she texts him back, and she says, You’re so lucky. I’m on the selection committee. Five companies responded. SAM Path responds, well, what did you say? And I was lucky. Peng responds, because you have me lol on the selection committee. It’s cone of silence. I broke all law for you already. Lol, I can’t make this stuff up,” Hochman said.

According to prosecutors, additional messages from October 2018 include discussions about securing contracts and handling LAUSD processes.

Hochman also described messages involving discussions about managing financial transactions and potentially using multiple companies to move funds.

“And then you have basically, later in the year, a situation where they continue these text messages going back and forth until eventually, in the year of 2018 all the way through 2022 and I have sends Ms. Peng’s company, these type of these type of monies,” Hochman said.

He added that one exchange included concerns about transferring large sums and suggestions about setting up additional entities.

“In fact, one of the explanations of what, of how that was going to go, came from Mr. Sampath, and he is basically going back and forth with her. And she says, RAM, a person who’s actually involved in LASD has apprehensions with so much money channeling to you, we need to come up with a lot of companies and Ms. Peng responds question mark and Mr. Sampath responds to Ms. Peng, at least three to four to take out the money. Close to million will be transferred to you. Easy to track, unless we are very careful in how we do it,” Hochman said.

He also described a response from Peng discussing the idea of creating additional companies in different jurisdictions.

“And Miss Payne responds, should we start another company under a different name? I was thinking an investment company, so money come in as investing, or I can set up a company in HK, that’s Hong Kong, China or Singapore,” Hochman said.

Hochman said prosecutors intend to present the evidence in court and seek convictions based on what they describe as clear intent reflected in the communications.

“Again, you can’t make this stuff up their own. Text messages will prove the mental intent, that intent to defraud, that intent to commit money laundering, this intent to violate our conflict of interest laws. And we intend to hold Ms. Peng, and Sampath, guilty beyond a reasonable doubt when this case goes before a court or a jury,” Hochman said.

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