Los Angeles Unified schools Supt. Alberto Carvalho introduced “Ed” the AI chatbot amid fanfare in March 2024, touting a revolutionary tool that would put the district at the leading edge of school technology.
But the multimillion-dollar project failed within months and never fully launched.
Now, the deal to bring Ed to the nation’s second-largest school district — and Carvalho’s longtime association with Debra Kerr, the Florida consultant who helped sell the technology to the district — is under scrutiny as part of a sweeping FBI investigation that included early morning raids Wednesday at Carvalho’s San Pedro home and district office and a home owned by Kerr.
The LAUSD contract was inked with a Boston-based startup called AllHere. But behind the scenes the company was collapsing and ultimately declared bankruptcy. Its founder, Joanna Smith-Griffin, was indicted on allegations that she defrauded investors. The charges were filed eight months after she and Carvalho stood side by side during the chatbot unveiling.
The raids mark a dramatic expansion into the activities and records of Carvalho and Kerr, who has filed a claim saying that the now-defunct AllHere owes her $630,000.
Neither Carvalho nor Kerr have been charged with a crime. The FBI has not released information about the nature or scope of the investigation; search warrant affidavits are sealed.
Sources with knowledge of the probe told The Times that Carvalho, not LAUSD, is a focus of the investigation. The raids are connected to the failed chatbot contract and fall under the broad category of financial issues, the sources said.
Neither Carvalho nor Kerr responded to requests for comment. Carvalho, who is typically the public face of the school system, has been silent. The Los Angeles Board of Education was scheduled to meet Thursday afternoon and the sole agenda item was “Public Employment: General Superintendent of Schools.”
The failed company behind the chatbot
Smith-Griffin was indicted in November 2024. Federal court filings in the Southern District of New York show that hearings in her case have repeatedly been pushed out after requests from both prosecutors and defense attorneys.
The most recent request for an adjournment of a scheduled status conference came in September. The prosecutor stated that additional time would “allow the parties to discuss a potential disposition for this case.”
Lou Shapiro, a well-known federal defense lawyer who is not involved in the case, cautioned that the “Trump administration tends to be trigger happy with raids.”
He said people should not jump to conclusions about who may be guilty of wrongdoing.
Trump administration targets fraud
The Trump administration and Bill Essayli, the first assistant U.S. attorney for Southern California under Trump, is especially focused on fraud. The administration has been accused — including by former federal law-enforcement employees — of targeting perceived political enemies.
Carvalho could fall on that list. He has been outspoken in the school system’s unflagging defense of immigrant rights and its criticism of Trump actions, including the administration’s opposition to diversity, equity and inclusion programs.
Yet the federal case against Smith-Griffin began before Trump took office.
“It is likely this is going somewhere,” said Neama Rahmani, a former federal prosecutor. “You don’t raid the superintendent’s home without a plan going forward.” If the target also happens to be “a political enemy of the administration,” the investigation is “likely to be a priority,” he said.
The Carvalho-Kerr connection
Carvalho and Kerr had a professional association going back to his long tenure as superintendent of Miami-Dade County Public Schools, according to their social media and Miami news reports. Kerr promoted education products for a variety of firms.
A figure within the industry said it would not be out of order for someone with her skills and connections to command a 10% commission on products for which she secured a contract.
Her demand for payment of $630,000 from AllHere, cited in bankruptcy documents, is roughly in line with 10% of the value of its contract with L.A. Unified.
Kerr is listed as an AllHere creditor in bankruptcy documents. In terms of AllHere’s contract with L.A. Unified, the district is an alleged victim: AllHere never delivered various contracted services.
L.A. Unified, however, has consistently said it was not financially harmed. Officials said they paid about $3 million out of $6 million in contracts, and that specific services and products were delivered for the $3 million that was paid.
A surprising collaboration
AllHere had limited experience in artificial intelligence — and in 2023 AI was largely a nascent industry, particularly in education. AllHere was best known for devising an automated system that could deliver messages to students and families that were individualized, but fell well short of what is commonly understood to be artificial intelligence.
Such messages would be generated, for example, if a student missed school.
One client of the company was Miami-Dade. Messages to students also might touch on academic issues and social-emotional development, according to bidding documents of the Florida school system.
AllHere apparently signed a contract with Miami-Dade after Carvalho’s departure from the school system. The company later defaulted on that contract, records show.
Carvalho has said he had no role in the selection of AllHere to work in L.A. Unified. The company was chosen during the district’s legally mandated contract bidding process, he said.
AllHere competed against two other bidders for the work. Under L.A. Unified rules, a panel would have reviewed and scored the bids. Underpinning the deal was the plan to begin a long-term collaboration: The L.A. Unified product could be marketed to other school systems — with profits and licensing fees shared by AllHere and LAUSD.
In later defending the selection of AllHere, a senior L.A. Unified official said the district was not alone in being fooled. The official pointed to positive press clippings about the company and its founder as evidence.
Celebration at first
The raids were an astonishing turn for the endeavor.
“This is a technology that becomes a personal assistant to students,” Carvalho said at a demonstration at Roybal Learning Center, west of downtown, in March of 2024. “It demystifies the navigation of the day … crunches the data in a way that it brings what students need.”
In December of 2022, Carvalho was already talking about his vision for each student having an individual academic acceleration plan. In his mind, this goal soon became married to the concept of artificial intelligence and an accessible interface that was to become Ed.
The announcement put L.A. Unified on the front page of a quickly evolving tech landscape.
Carvalho subsequently appeared with Smith-Griffin at an influential education technology conference.
But only a small number of schools tried it out, each with a sample of students and parents. And the company already was collapsing behind the scenes, its technology quickly being surpassed by companies better resourced to refine and advance their products.
By June — three months after Ed’s high-profile debut — most of AllHere’s staff was laid off. In the bankruptcy filing, one of the largest assets at the time was an LAUSD contract valued at $2.88 million. Criminal charges against Smith-Griffin followed.
