The head of an education technology startup that created a highly touted chatbot for the Los Angeles school system has been arrested and charged with fraud.
Federal prosecutors, in an indictment unsealed Tuesday, accused Joanna Smith-Griffin of defrauding investors and charged her with securities fraud, wire fraud and aggravated identity theft.
Smith-Griffin, 33, is the founder and former chief executive of AllHere, the Boston-based company that created “Ed,” an artificial-intelligence tool billed as revolutionary for students’ education and the interaction between the L.A. Unified School District and the families it serves.
After unveiling the chatbot with great fanfare in March, L.A. school officials, months later, quietly disconnected the tool — which was supposed to respond to any question from students or parents in an accurate, helpful and private manner.
Although the episode was embarrassing for L.A. Unified — schools Supt. Alberto Carvalho had stood alongside Smith-Griffin in promotional appearances — the financial damage to the nation’s second-largest school system, which this year has an $18.4-billion budget, appears to be limited.
School district officials say they’ve spent about $3 million of what had been a $6-million commitment to the firm — and received services and technology for that investment. Carvalho recently told The Times that he was optimistic about salvaging the technology for later use.
On Tuesday, Carvalho provided a brief comment on the developing criminal case.
“The indictment and the allegations represent, if true, a disturbing and disappointing house of cards that deceived and victimized many across the country,” Carvalho said. “We will continue to assert and protect our rights.”
According to prosecutors, Smith-Griffin orchestrated “a deliberate and calculated scheme to deceive investors in AllHere Education, Inc., inflating the company’s financials to secure millions of dollars under false…