Joanna Smith Griffin, founder of AllHere Education Inc., was charged with securities fraud, wire fraud, and identity theft. Smith-Griffin is accused of taking nearly $10 million from investors and using some of it to buy a home and finance a wedding. Prosecutors allege Smith-Griffin lied to investors about All Here Education’s revenue and the number of clients the company worked with.
The founder of an artificial intelligence startup promoted to improve communication between school districts and families has been arrested on charges of defrauding investors.
According to a news release from the U.S. Attorney’s Office for the Southern District of New York, Joanna Smith-Griffin, founder and CEO of AllHere Education, Inc., was arrested Tuesday in North Carolina on securities fraud, wire fraud and personal fraud charges. It was announced that he was arrested on suspicion of information theft. .
The indictment unsealed Tuesday alleges that Smith-Griffin lied to potential investors about the revenue generated by All Here Education and the number of school districts the startup had signed up with over the past several years. are.
Prosecutors allege in the indictment that Smith-Griffin fraudulently obtained nearly $10 million from investors in All Here Education, wired at least $600,000 into personal bank accounts, and used some of the money to pay for down payments on homes and other funds. He claims that he used the money to pay for his wedding. .
Court records do not list an attorney for Smith-Griffin. USA TODAY sent an email to AllHere Education but did not receive a response by Wednesday evening.
All Here Education’s employees have been fired and the company was placed under the control of a court-appointed bankruptcy trustee as of Tuesday, according to the office of U.S. Attorney Damian Williams for the Southern District of New York.
Prosecutors say there were many lies.
Prosecutors said in November 2020, Allhere told investors that the company made $3.7 million in revenue that year, but the actual figure was closer to $11,000, the indictment states. .
During a fundraising campaign that raised $8 million from investors, Smith-Griffin announced that AllHere Education will work with eight educational institutions: New York City Department of Education, Atlantic Public Schools, Boston Public Schools, Baltimore County Public Schools, and Prince George’s County Public Schools. He said he was doing it. schools, Durham Public Schools, Grand Rapids Public Schools and the Indian Bureau of Education, according to the indictment.
In fact, the only schools that had a contractual relationship with All Here Education were Boston Public Schools and Prince George’s County Public Schools, the indictment says.
Prosecutors detail how alleged fraud scheme worked
Prosecutors said Smith-Griffin used the name of an outside consultant to communicate with investors and All Here Education’s board of directors about discrepancies in financial reports.
According to the indictment, Smith-Griffin used an AllHere Education email account in the name of an outside consultant to notify investors and the board of directors about the company’s revenue, number of contracts with school districts, payments made by customers, and more. . It was all false, the indictment says, and the real outside consultants didn’t realize Smith-Griffin was using her likeness until a board member mentioned it.
Days after Smith-Griffin’s alleged fake email, the company’s board of directors removed her from access to All Here Education’s bank and corporate accounts, according to the indictment. Smith-Griffin was also removed from his role as CEO.
Furloughs and bankruptcy
In June, All Here Education furloughed most of its employees, and in August it filed for Chapter 7 bankruptcy, allowing the company to liquidate its assets.
What was AllHere Education?
Mr. Smith-Griffin founded AllHere Education, Inc. in 2016. The company was known for using artificial intelligence chatbots to interact with students and families.
According to the indictment, around 2023, Allhere entered into a multimillion-dollar contract with California’s Los Angeles Unified School District to develop a synthetic chatbot named “Ed.” Ed used generative artificial intelligence to guide students to resources and assignments and provide encouraging feedback.
A Los Angeles Unified School District spokesperson told USA TODAY in an email: “The indictment and allegations, if true, are a disturbing and unfortunate mantel in the sand that has deceived and victimized many people across the country.” He spoke via email. “We will continue to assert and defend our rights.”
In 2021, Ms. Smith-Griffin was named a recipient of the Forbes 30 Under 30 Award in Education, and this year she was included on Inc.’s 250 Women Founders list.
Greta Cross is USA TODAY’s national trends reporter. Follow her on X and on Instagram @gretalcross. Idea for a story? Email gcross@gannett.com.
