社区黑料

Get stories like this delivered straight to your inbox. Sign up for 社区黑料 Newsletter

Federal prosecutors have subpoenaed documents from the bankruptcy of failed education technology company AllHere, a once-lauded startup that boasted $12 million in venture capital and a $6 million contract with Los Angeles schools to build a buzzy AI chatbot. 

The U.S. attorney’s office for the Southern District of New York served the grand jury subpoena in early September to the court-appointed trustee managing the liquidation of AllHere鈥檚 assets to pay off its creditors, according to records filed with a federal court in Delaware. A federal grand jury subpoena indicates that AllHere or someone associated with the company is the target of a federal criminal investigation by the Department of Justice.  

Attorney Stephanie Wickouski, a partner at the New York-based firm Locke Lord, told 社区黑料 the subpoena means that federal prosecutors 鈥渉ave a reason to commence a criminal investigation and that鈥檚 certainly an exceptional circumstance.鈥� 

鈥淭here are a fair amount of investigations that involve bankruptcy cases and a lot of them are for conduct that occurred prior to the bankruptcy,鈥� said Wickouski, the author ofon bankruptcy fraud and white-collar crime. 

In an order approved on Monday, the bankruptcy trustee agreed to provide documents to federal prosecutors on the condition that certain sensitive information remain confidential 鈥渋n the best interests of鈥� the company鈥檚 value. Federal prosecutors can use the records 鈥渁s needed or as required by law in connection with its investigation and/or any resulting criminal proceeding,鈥� the order notes.

A spokesperson for the U.S. attorney鈥檚 office didn鈥檛 respond to requests for comment and the target of the federal inquiry remains unclear 鈥� as do any allegations of criminal wrongdoing. But Wickouski said the court-appointed trustee is in the best position to provide information about AllHere鈥檚 assets, business dealings and financial transactions. The 鈥渕ost likely scenario,鈥� she said, is that 鈥渢he company and its principals鈥� are the target of the investigation.

On the same day as a Sept. 11 bankruptcy hearing, trustee George Miller said he had 鈥渄iscovered assets鈥� at AllHere and changed its Chapter 7 bankruptcy case from one without any monetary value to one where creditors could recoup some of the money they鈥檙e owed. The court gave AllHere creditors 90 days to submit proof of claims to 鈥渁ssets from which a dividend might possibly be paid.鈥� 

The 鈥渄iscovered assets鈥� would appear to contradict statements by Toby Jackson, the company鈥檚 former chief technology officer and one of its only remaining executives, at the hearing that the company was effectively broke, citing one of its only assets as a $500 company laptop used by ousted CEO Joanna Smith-Griffin. Jackson noted that the company couldn鈥檛 access the laptop鈥檚 contents because Smith-Griffin had refused to share the password. AllHere listed more than $1.75 million in itemized liabilities, bankruptcy records show.

Neither Jackson, AllHere鈥檚 Delaware bankruptcy attorney, Joseph Mulvihill; trustee Miller nor his lawyer, Ricardo Palacio, responded to requests for comments. Smith-Griffin, a former Boston educator and family engagement counselor who went on to create digital tools to combat chronic absenteeism, has not spoken publicly or responded to requests for comments since her company鈥檚 sudden financial collapse this spring.

At the hearing last month, Jackson struggled to answer Miller鈥檚 questions about why AllHere paid Smith-Griffin $243,000 in expenses between September 2023 and June 2024 and owed $630,000 to its largest creditor 鈥� an education technology salesperson with longstanding ties to Los Angeles schools Superintendent Alberto Carvalho. The Florida-based salesperson, Debra Kerr, said during the meeting she was never paid commission for her work closing the lucrative AllHere deal in L.A. Kerr鈥檚 son, Richard, is a former AllHere account executive who told 社区黑料 he pitched the company to Los Angeles school leaders.

The school district 鈥渉as not received any requests to date鈥� from federal prosecutors, a district spokesperson said in a statement Monday to 社区黑料. Los Angeles Unified School District鈥檚 independent inspector general in July launched an investigation into allegations first reported by 社区黑料 that its much-celebrated and now-unplugged AI chatbot named 鈥淓d鈥� exposed students鈥� personal data in violation of school district policy and standard industry security practices.

Carvalho later announced that he would form to determine what went wrong with the district鈥檚 relationship with AllHere and how it could move forward incorporating AI into the nation鈥檚 second-largest school system. Carvalho and Smith-Griffin made joint appearances at ed tech conferences throughout the spring touting the capabilities of 鈥淓d,鈥� an animated sun they said could interact individually with and accelerate the learning for some 540,000 students and their families.

Several other creditors listed in AllHere鈥檚 bankruptcy case have ties to Carvalho, including the communications firm of his former spokesperson when he was superintendent in Miami and the Foundation for New Education Initiatives, a Florida-based in 2008. The foundation came under scrutiny in 2020 after the for-profit company K12, Inc., now known as Stride, Inc., gave the district-run entity a $1.57 million donation just a day before the school board voted to stop using its online learning platform. The donation gave an appearance of impropriety, by the Miami-Dade inspector general found, but there were 鈥渘o actual violations.鈥�

In the case of AllHere, the subpoena to the bankruptcy trustee suggests that federal prosecutors are likely 鈥渋n a fairly early stage鈥� of their investigation, attorney Wickouski said. Any indictments that could follow, she said, won鈥檛 likely be announced for months. 

Did you use this article in your work?

We鈥檇 love to hear how 社区黑料鈥檚 reporting is helping educators, researchers, and policymakers.