Joanna Smith-Griffin, 33, the founder of ALLHere Education Inc., an artificial intelligence company that provided chatbot-based learning tools to major school districts, was arrested Tuesday on charges of securities and wire fraud, as well as identity theft, The Associated Press reports.
The arrest, which took place at her North Carolina home, follows an indictment unsealed in Manhattan federal court.
Smith-Griffin’s company, which developed the AI chatbot “Ed” for creating student learning plans, had contracts with the Los Angeles Unified School District, New York City, and Atlanta school districts. The Los Angeles district ceased using the product after ALLHere Education Inc. declared bankruptcy.
The indictment alleges that Smith-Griffin defrauded investors out of millions of dollars since 2020 through misrepresentations about the company’s financial health. Prosecutors claim she used these fraudulently obtained funds for personal expenses, including a down payment on her North Carolina home and her wedding. Following the company’s collapse and subsequent layoffs, a trustee was appointed to manage its bankrupt assets.
US Attorney Damian Williams stated that Smith-Griffin “orchestrated a deliberate and calculated scheme to deceive investors… inflating the company’s financials to secure millions of dollars under false pretenses.” James E. Dennehy, head of the New York FBI office, added that she misrepresented the company’s structure and “masqueraded as a financial consultant” to cover up discrepancies. Dennehy criticized her prioritization of personal expenses over the company’s needs, claiming it damaged the potential for educational improvements in major school districts.
Smith-Griffin is expected to appear in court in North Carolina later today.
