Joanna Smith-Griffin, the founder of ALLHere Education, was arrested on fraud charges Tuesday after being accused of using investor funds for personal expenses as her AI education company collapsed.
Smith-Griffin, 33, of Raleigh, North Carolina, was charged with securities and wire fraud, as well as identity theft. Her company, ALLHere Education, developed “Ed,” an AI-powered chatbot used by school districts like New York City, Los Angeles, and Atlanta to create learning plans for students. The Los Angeles Unified School District, however, discontinued using the product after the company’s financial collapse.
According to the indictment unsealed in Manhattan federal court, Smith-Griffin misled investors by inflating the company’s financials to secure millions of dollars from them. Authorities say she used some of the funds to make a down payment on her home and to pay for her wedding, despite the company’s failing finances.
The company eventually went bankrupt, and a trustee was appointed to manage its finances. U.S. Attorney Damian Williams described the scheme as “deliberate and calculated,” highlighting how Smith-Griffin’s actions hurt the potential for improving educational tools in major school districts.
The FBI’s James E. Dennehy added that Smith-Griffin misrepresented the composition of her startup and posed as a financial consultant to cover up discrepancies once they were discovered.
Smith-Griffin’s court appearance was set for the afternoon in North Carolina, but it was not immediately clear who would represent her.