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An AI CEO was arrested for defrauding investors — and allegedly using the money to pay for her wedding

Nov 20, 2024 - qz.com
Joanna Smith-Griffin, the founder of AllHere Education, an AI startup, was arrested and charged with securities fraud, wire fraud, and identity theft. She is accused of deceiving investors by inflating the company's financials to secure millions of dollars under false pretenses, including lying about having contracts with major school districts and claiming non-existent revenues. Prosecutors also allege that she embezzled corporate funds for personal use, including a downpayment on her house and her wedding expenses.

AllHere Education, known for creating the "Ed" chatbot used by major school districts, filed for Chapter 7 bankruptcy and laid off workers before the charges were filed. The company is now under the control of a court-appointed bankruptcy trustee. Smith-Griffin's combined charges carry a potential sentence of over 40 years, with the aggravated identity theft charge carrying a mandatory two-year sentence.

Key takeaways:

  • Joanna Smith-Griffin, founder of AllHere Education, was charged with securities fraud, wire fraud, and identity theft for allegedly defrauding investors.
  • Prosecutors claim she lied about the company's financials and contracts with major school districts to secure millions in investments.
  • Smith-Griffin is also accused of embezzling corporate funds for personal expenses, including a house downpayment and her wedding.
  • AllHere Education has filed for Chapter 7 bankruptcy and is now controlled by a court-appointed bankruptcy trustee. Smith-Griffin faces over 40 years of potential incarceration if convicted.
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