Federal agents searched the home and office of Los Angeles Unified Superintendent Alberto Carvalho on February 25, 2026. The search warrant affidavits remain sealed, but sources indicate the probe is tied to AllHere Education, a defunct AI startup that sold LAUSD a $6 million chatbot contract. AllHere CEO Joanna Smith-Griffin was arrested in November 2024 for fraud, among other things. Separately, labor unions have sued LAUSD over misuse of arts funding. No arrests yet.

1. That Chatbot Deal is Way Sus (Federal Prosecutors, Investigators)

The AllHere contract collapsed in three months. Prosecutors want to know who signed off and why.

The chatbot that launched and died. LAUSD’s AI chatbot “Ed” was announced with fanfare in March 2024, positioned as a cutting-edge tool to help students navigate college and career planning. It launched March 10, 2024, rolling out to 100 low-performing schools. By June 14, 2024, three months later, Carvalho unplugged it as AllHere furloughed most of its staff and collapsed financially. LAUSD had paid about $3 million of the $6 million contract.

There were separate data privacy problems. Chris Whiteley, AllHere’s senior director of software engineering, told district officials, the independent inspector general’s office, and state education authorities that “Ed” processed student records in ways that violated LAUSD’s own data privacy rules and exposed sensitive information to hacking risks -- all separate and apart from the founder’s financial fraud.

The FBI is looking at more than just the chatbot case. Sources indicate the probe extends to whether Carvalho received kickbacks during his prior tenure as Miami-Dade superintendent. The fact that agents searched properties in both Los Angeles and Miami suggests investigators are tracing a pattern across his career, not just one deal.

2. Carvalho Treated Funds Like a Shell Game (UTLA, Unions, Educators)

$76.7 million in Prop 28 arts funding was supposed to hire new teachers. The union says it subsidized existing payroll instead.

Proposition 28 was designed to be new money for new programs. Approved by California voters in 2022, it dedicates roughly $1 billion annually statewide to arts and music education. LAUSD’s share is $76.7 million. The law stipulates that districts must increase arts funding by hiring new teachers and creating new programs, not by covering salaries for existing arts staff already on the payroll.

The district’s own numbers tell a sad story. LAUSD budgeted $206.2 million total toward arts: its baseline $129.5 million plus the $76.7 million Prop 28 allocation. But the district used much of the Prop 28 money to pay for existing staff and existing programs. Carvalho reported to the board that LAUSD hired only 100 new arts teachers across nearly half a million students. A lawsuit filed by eight student families, backed by UTLA, SEIU Local 99, and Teamsters 572, alleges this violates state law and has disproportionately deprived Black and Latino students at low-income schools of promised arts access.

UTLA president Cecily Myart-Cruz has been direct. “The superintendent pulling out a bulletin saying, ‘Oops, my bad,’ doesn’t work,” she told EdSource. “I’m exasperated by the district’s lack of response and responsibility to providing arts educators for our babies and the communities in which we serve.” When the FBI arrives at the same time a Prop 28 lawsuit is proceeding, the pattern of spending questions compounds.

3. Hold On, Just Look At Our Results (Carvalho, District Administration)

Test scores are up. Graduation rates have climbed.

Carvalho has posted measurable gains since arriving in February 2022. The district’s 2024 graduation rate reached 87 percent, up from 77 percent five years prior. LAUSD students achieved record performance on California’s 2025 assessments. All student groups outpaced their peers statewide, and LAUSD results exceeded pre-pandemic performance across disciplines.

The district argues Prop 28 compliance is a matter of interpretation. LAUSD’s position is that district-wide arts spending increased in aggregate, which satisfies the law. Using existing teachers and infrastructure to scale programs is smart management, not misallocation.

The fiscal reality complicates everything. Carvalho has warned that LAUSD faces a structural budget deficit that could lead to insolvency within three years without major reductions. Facing the FBI, the unions, and the courts over money is ironic.

Where This Lands

Federal investigators must have a basis for raiding the superintendent’s home and office. Unions and families argue Carvalho’s management was reckless with Prop 28 and negligent on AllHere. Carvalho’s administration points to graduation rates and test scores that have never been higher. The investigation is sealed, no charges have been filed, and the Prop 28 lawsuit is proceeding. What prosecutors find will tell us whether this closes as a vendor fraud case or expands into something wider.

Sources

ABC7 Los Angeles, “FBI serves search warrants at LAUSD headquarters and Superintendent Alberto Carvalho’s home,” February 25, 2026, https://abc7.com/post/fbi-serves-search-warrants-lausd-headquarters-superintendent-alberto-carvalhos-home/18649728/

CNN, “FBI searches home and office of LAUSD superintendent,” February 25, 2026, https://edition.cnn.com/2026/02/25/us/lausd-fbi-search-warrants-alberto-carvalho

NBC News, “FBI searches office, home of Los Angeles schools superintendent,” February 25, 2026, https://www.nbcnews.com/news/us-news/fbi-searches-office-home-los-angeles-schools-superintendent-rcna260744

EdSource, “FBI raids home and office of Los Angeles Unified superintendent Carvalho,” February 2026, https://edsource.org/2026/fbi-raids-home-and-office-of-los-angeles-unified-superintendent-carvalho/752038

EdSurge, “An Education Chatbot Company Collapsed. Where Did the Student Data Go?” July 2024, https://edsurge.com/news/2024-07-15-an-education-chatbot-company-collapsed-where-did-the-student-data-go

EdSource, “Communities demand transparency after ‘Ed,’ LAUSD’s AI chatbot, fails,” 2024, https://edsource.org/2024/communities-demand-transparency-after-ed-lausds-ai-chatbot-fails/717772

EdSource, “Unions allege LAUSD is misusing Prop 28 funds,” 2024, https://edsource.org/2024/unions-allege-lausd-is-misusing-prop-28-funds/709118

LAist, “Lawsuit charges misuse of arts education funding at LAUSD schools,” 2024, https://laist.com/news/education/lawsuit-charges-misuse-of-arts-education-funding-at-lausd-schools

LAist, “LAUSD assessment scores exceed pre-pandemic levels,” 2025, https://laist.com/news/education/los-angeles-unified-school-district-smarter-balanced-assessment-scores-2025-exceed-prepandemic-levels

AI Incident Database, “LAUSD Ed Chatbot Incident,” https://incidentdatabase.ai/cite/793/