This startup founder spent his school money on a lavish wedding and mansion
Sometimes it is difficult to distinguish innovation from fraud, especially when a promising project turns into a disappointment. That seems to be exactly what happened to Joanna Smith-Griffin, founder of tech education startup AllHire. While his company set out to provide a revolutionary chatbot to Los Angeles schools, he is now accused of using those funds for lavish personal expenses, including an extravagant wedding and the purchase of a mansion.
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misleading promises
Joanna Smith-Griffin managed to convince the Los Angeles school district of the effectiveness of her educational chatbot. At the national level this project aims to transform communication between families and the education system.
However, behind these promises lay a less glorious reality. Federal prosecutors have now accused him of lying about the value of his company to attract massive investments, while using those funds to further his own interests.
BREAKING: AI founder arrested in fraud scheme
• Joanna Smith-Griffin, 33, of Raleigh, was charged with fraud and identity theft.
• Ran AllHere Education, creator of “Ed,” a chatbot for schools
• Allegedly spent millions of investors’ money on personal expenses
• Schools in LA, NYC,… pic.twitter.com/WmpLQz7cn7
– Los Angeles Magazine (@LAmag) 20 November 2024
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suspicious use of funds
The charges against Smith-Griffin describe a pattern of multiple frauds. She allegedly not only inflated her company’s figures, but also used part of the investment to finance a lavish wedding and purchase a home in North Carolina.
Despite a $6 million contract with the Los Angeles School District, only half of it was reportedly paid to AllHire before its bankruptcy. This situation leaves schools and investors perplexed and disappointed.
business collapse
AllHire’s chatbot, called “Ed”, was launched with much fanfare. However, just months after its introduction, it was quietly dropped by the school district.
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AI experts say the pressure on startups to promise more than they can deliver is real. However, the responsibility also lies with the institutions themselves who must be diligent in their partnerships.
| 💸diversion | use of money for personal expenses |
| 🤖Technical failure | Removing “Add” chatbot after unsuccessful launch |
Reactions and results
Los Angeles School District Superintendent Alberto Carvalho condemned Smith-Griffin’s actions, calling the case a “frustrating and disturbing house of cards.”
He expressed hope that chatbots could be revived, but the loss of trust between public institutions and private companies remains a major hurdle.
Given these incidents, how can schools better protect themselves from such abuse in the future?
