Joanna Smith-Griffin, CEO of the AI education startup AllHere Education, Inc., has been charged with securities fraud, wire fraud, and aggravated identity theft for defrauding investors.
An indictment filed in the Southern District of New York alleges from 2020 to 2024, Smith-Griffin misrepresented the company's revenue, customer base and financials to secure nearly $10 million in investments.
According to U.S. Attorney Damian Williams, she "orchestrated a deliberate and calculated scheme to deceive investors in AllHere Education, Inc., inflating the company's financials to secure millions of dollars under false pretenses."
Smith-Griffin began inflating the value and cash reserves to investors during Series A funding in November 2020, according to the indictment.
Prosecutors say in 2021 she claimed her Harvard University startup made $3.7 million in 2020 and had a cash reserve of $2.5 million. She also said the company's clients included the New York City Department of Education and Atlanta Public Schools.
In reality, prosecutors claim, AllHere only made $11,000 in revenue in 2020 and had $494,000 in cash. The company did not have contracts with the customers she claimed.
"Her alleged actions impacted the potential for improved learning environments across major school districts by selfishly prioritizing personal expenses," FBI Assistant Director in Charge James E. Dennehy said.
She allegedly embezzled funds for personal expenses, including a home down payment in North Carolina and to pay for her wedding.
The company filed for Chapter 7 bankruptcy.
Smith-Griffin faces up to 20 years in prison for each fraud charge, plus two years for identity theft.
The Federal Bureau of Investigation continues to investigate the case being prosecuted by the U.S. Attorney's Office.
Originally published on International Business Times.
