An investigation into the failed implementation led to an investigation of the LAUSD superintendent
Alberto Carvalho and Debra Kerr’s roots date back to their days together in the Florida academic community.
Carvalho was a passionate leader of Miami-Dade County schools, while Kerr was a well-known figure in the private sector, working for firms that do business with school systems.
Carvalho delivered a keynote speech at a CEO conference sponsored by the Age of Learning, where Kerr was working at the time as head of marketing.
Over the years, Kerr has shared Carvalho’s Facebook posts on his page, congratulating him on winning the award and often using the hashtag “#leadershipmatters.” Three years ago, Kerr posed for a smiling photo alongside Carvalho, then the Los Angeles superintendent, during what he described as his “amazing” commencement address.
In 2023, Carvalho and Kerr were linked for another job. Currently, Carvalho was the head of the Los Angeles Unified School District and Kerr was working with AllHere, a Boston-based startup that promised a revolutionary tool in the form of a chatbot that would provide academic guidance and other assistance to students and families — putting the district on the cutting edge of artificial intelligence in education.
But this multi-million dollar project has failed in the few months since it was partially started. Then, the company went bankrupt and its CEO was accused by federal prosecutors of fraud. This week, the FBI searched the homes of Carvalho and Kerr as part of the investigation, sources confirmed to AllHere. The LAUSD headquarters was also searched.
LAUSD placed Carvalho on indefinite administrative leave on Friday, clouding his future at the helm of the nation’s second-largest school district.
Authorities did not provide details about the scope of the investigation or mention any targets. Carvalho and Kerr could not be reached for comment. But a review of court records and other documents provides a window into how a technology project that was envisioned as reshaping education collapsed amid allegations of fraud.
‘Award winning solution’
Joanna Smith-Griffin founded AllHere while a startup incubator at Harvard University in 2016, according to the U.S. attorney’s office for the Southern District of New York. His goal was to use technology to reduce absenteeism.
On the former’s now-defunct website, Smith-Griffin described herself as a former district attendance coordinator and family outreach coordinator who “revealed the frustrations that often arise when trying to connect students with the right support at the right time.”
“At AllHere, our mission is to strengthen student outcomes and improve staff effectiveness by providing easy-to-use, technology-powered, evidence-based educational support resources,” the website reads.
AllHere’s technology included an automated text messaging service that would send “nudges” to parents in an effort to improve their children’s class attendance, according to the lawsuit charging Smith-Griffin. Later he used the first strategy of using AI technology to create a “chatbot” to communicate with students and their families.
On its website, AllHere calls itself an “award-winning solution” and “the only digital app powered by artificial intelligence and developed by educators that has been independently proven to positively impact stakeholder communication, family engagement, and student achievement.”
Amidst the company’s intended success, Smith-Griffin’s public profile also grew. In 2021, he was on Forbes magazine’s coveted “30 Under 30” list of leaders in the field of education.
“My goal in the next 12 months is to take over the world,” Smith-Griffin told Forbes. “We want to help students go to school every day and put them on the path to success.”
AllHere had client school districts in different parts of the country, but authorities later suspected that AllHere was exaggerating its business success.
In late 2022, Miami-Dade County Public Schools awarded AllHere a three-year, $1.8-million contract to build communication software to help at-risk students. The bidding process for the project began in the latter part of 2021, when Carvalho was the district’s superintendent, and the school board approved the deal in October 2022, about eight months after he left.
Carvalho said he had nothing to do with that contract. It is unclear what role Kerr played in securing the deal and whether he spoke to Carvalho about the job.
The following year, AllHere landed what turned out to be a $6 million LAUSD job order to build a new AI chatbot, “Ed,” prosecutors said. The company’s biggest value proposition was looking forward, as AllHere would manage, measure and continue to develop Ed – and partner with LAUSD to market and license the product to other school systems.
Carvalho also denied involvement in the AllHere election at LAUSD. At the AllHere fraud trial in September 2024, Kerr said he helped the company close a cash deal in LA.
In a quick announcement in August 2023, Carvalho said “Ed” will be LAUSD’s new student counselor, scheduled to inform parents of their children’s grades, test results and attendance. The official issue was March 2024: At an event held at the Roybal Learning Center, dignitaries gave speeches, a masquerader showed off Ed’s suit and a DJ spun songs.
But AllHere is already falling apart behind the scenes.
The collapse of the company
Around May 2024, Smith-Griffin, who is the sole provider of financial updates to investors and the company’s board of directors, was late in submitting AllHere’s first quarter financial report.
According to prosecutors, that prompted a friend at one of the investment firms to contact AllHere’s accountant for a report, showing that AllHere’s annual recurring revenue was millions of dollars less than what Smith-Griffin had reported to investors in previous quarters.
Two of AllHere’s main investors, along with an outside financial accountant, began questioning Smith-Griffin about the discrepancy.
Prosecutors allege that in an effort to conceal the truth, Smith-Griffin in May 2024 created a fake email address for a real AllHere financial advisor and sent additional false financial and client information to investors.
That same June, the board of directors removed Smith-Griffin’s access to AllHere’s bank and corporate accounts and terminated her as chief executive, prosecutors said. The company laid off most of its employees, closed its operations and filed for bankruptcy the following month, according to the lawsuit.
On September 4, 2024, the US Attorney’s Office for the Southern District of New York served the bankruptcy trustee with a subpoena seeking certain information and documents. In November, authorities arrested Smith-Griffin at his family home in North Carolina. In the charges against him, prosecutors accused him of engaging in a scheme to defraud investors since November 2020.
As Smith-Griffin sought millions from investors, prosecutors said he misrepresented his startup capital, cash flow and customer base in sales materials and financial statements. Smith-Griffin reportedly told investors that AllHere earned an estimated $3.7 million in 2020 from a total of 92 clients. In recent rounds of financing, he allegedly increased that year’s revenue to $6.8 million.
In fact, prosecutors said, the startup generated about $11,000 that year. And, according to the lawsuit, AllHere has never had more than 31 client schools and school districts.
Smith-Griffin also revealed which public school districts are AllHere customers. According to the lawsuit, six of the eight states that claim to be customers have no contractual relationship with AllHere. The two districts paid AllHere about $27,000 and $30,000 over the life of their contracts. Eight districts did not include LAUSD.
Prosecutors accused Smith-Griffin of defrauding AllHere investors of approximately $10 million. He is accused of using some of that money to pay a $150,000 down payment on a house in North Carolina and to pay for his wedding expenses.
Smith-Griffin has pleaded not guilty to charges of fraud, embezzlement and aggravated identity theft. His lawyers did not respond to a request for comment.
Former FBI Acting Deputy Director James E. Dennehy said in a statement at the time that Smith-Griffin’s alleged actions “impacted the improvement of learning environments in all major school districts by selfishly prioritizing personal costs.”
“The FBI will make sure that anyone who takes advantage of the promise of educational opportunities for our city’s children will be taught a lesson,” Dennehy added.
Bankruptcy proceedings
Kerr’s relationship with AllHere came to the fore during a September 2024 bankruptcy hearing. Kerr is listed in Delaware bankruptcy filings as the company’s largest creditor — owed $630,000 — though that is listed as disputed.
The education website The 74 reported that during the hearing of the fraud case, Toby Jackson, the former chief technology officer of AllHere, said that he had no invoices to confirm the debt. Kerr came forward during the hearing, saying he was never paid his money from the first payments made by LAUSD to the start of their contract, the website said.
“I have never collected any commissions and it is in the contract based on a percentage of the commission that would have been sold on any sales collected,” Kerr told the trustee, according to The 74.
Neither the FBI nor confidential sources have identified Kerr as a target of the investigation. Attempts to contact him were unsuccessful.
In AllHere’s bankruptcy filing, one of the largest assets listed was the LAUSD contract – valued at $2.88 million.
The impeachment and collapse of AllHere was embarrassing for Carvalho and the school system but did not appear to represent a major financial exposure. The school system has spent nearly $3 million with the company on completed work as part of contracts worth up to $6 million over five years. By comparison, the district’s budget this year is $18.8 billion.
In an emailed statement, Miami-Dade County Public Schools officials said the district is aware of the investigation involving Carvalho but declined to comment. A spokeswoman did not respond to a question about whether the Miami-Dade school system made any payments to AllHere for its $1.89 million contract, instead referring it as a public records request that will take more time to complete.
