What’s the Story?
Joanna Smith-Griffin, the founder and former CEO of AllHere, has been arrested on charges of fraud. She is accused of deceiving investors out of approximately $10 million and using company funds for personal expenses, including paying for her wedding and a down payment on a house.
What Does AI Have to Do with It?
AllHere claimed to be developing an AI-powered chatbot for schools, intended to improve communication between educational institutions and students' families. The company even announced a $6 million contract with the Los Angeles Unified School District. However, the project was never completed, and the company ceased operations.
The Fraud Scheme
According to the charges, Smith-Griffin provided false information to investors about the company’s revenue and client base. She claimed that AllHere had generated $3.7 million in revenue in 2020 and secured contracts with major school districts like New York and Atlanta. In reality, the revenue was only $11,000, and the alleged contracts did not exist.
How Was She Exposed?
Discrepancies in the company’s financial reports were uncovered by investors and external auditors. To cover up the fraud, Smith-Griffin created a fake email account, posing as a financial consultant, and sent falsified documents to a major investor. She now faces up to 20 years in prison.
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