Los Angeles schools chief’s home searched in probe of failed AI contract

Federal investigators on Wednesday searched the home and office of Los Angeles Unified School District (LAUSD) Superintendent Alberto Carvalho in a probe potentially linked to a failed multimillion-dollar artificial intelligence contract.

The investigation follows a $6 million agreement Carvalho awarded to the education technology firm AllHere, which included a $3 million upfront payment. Federal agents also searched the Miami home of Debra Kerr, a former AllHere sales employee who reportedly maintains a close relationship with Carvalho from his time leading Miami-Dade County Public Schools.

The 2023 contract aimed to develop "Ed," an AI chatbot designed to reduce student absenteeism. The project collapsed in 2024 after the company’s founder was charged with fraud and embezzling public funds.

Federal officials confirmed the searches were conducted but declined to provide further details, noting that the warrants remain under seal.

Sources familiar with the matter said the investigation is focused on Carvalho’s personal finances rather than the district’s accounts. LAUSD, the second-largest school district in the United States, issued a statement saying it is cooperating fully with the investigation.

The federal search of the residence and offices of Alberto Carvalho, Superintendent of the Los Angeles Unified School District (LAUSD), marks a significant escalation in what appears to be a high-level criminal probe. By focusing the investigation on Carvalho personally rather than the district as an entity, federal authorities are signaling a pursuit of individual misconduct, likely involving allegations of corruption or undisclosed conflicts of interest.

The case underscores the inherent risks in public-private procurement, particularly within the rapidly expanding and often opaque ed-tech sector. Central to the investigation is LAUSD’s expedited $6 million artificial intelligence contract with AllHere Education. The district’s decision to pay half of the contract value upfront to a firm whose founder was later indicted for fraud suggests a profound failure of due diligence. Allegations of a personal connection between Carvalho and an AllHere representative further complicate the narrative, pointing toward a lack of transparency in the bidding process.

This scrutiny is not without precedent. Carvalho’s tenure has previously been clouded by similar governance concerns, most notably a 2020 incident in Miami where a non-profit he established accepted contributions from a vendor seeking district business. This recurring pattern of behavior raises serious questions about institutional integrity.

For the nation’s second-largest school district, which manages billions in taxpayer funds and oversees the education of hundreds of thousands of students, the stakes are exceptionally high. Beyond the immediate legal ramifications for Carvalho, the fallout from this federal inquiry threatens to erode public trust and could trigger a broader overhaul of oversight mechanisms within California’s public education system.

For the significant Vietnamese-American community in Los Angeles with children enrolled in the LAUSD, this situation hits home. From families managing local phở restaurants to those working in the nail salon industry, community members are expressing deep concern. The instability and allegations of corruption within the district’s top leadership raise serious questions about how their tax dollars are being utilized and whether student welfare remains the ultimate priority.