Tech start-up tycoon seen in Forbes 30 under 30 spent investors millions on her splashy wedding and mansion

The founder of an artificial intelligence company used in schools across the US has been accused of spending investors money on herself as her company spiraled into bankruptcy.

Joanna Smith-Griffin, 33, of Raleigh, North Carolina, was arrested in her home state and charged with securities fraud, wire fraud and identity theft on Tuesday, a indictment unsealed in Manhattan federal court revealed.

The Forbes 30 Under 30 mention founded ALLHere Education Inc., an artificial intelligence company that supplied school districts across the country with a learning acceleration web-based platform designed to boost student success and revolutionize how K-12 education is tailored to meet individual needs.

Created in 2016, the company also manufactured Ed the chatbot - a product used by the Los Angeles Unified School District for a time before eventually shutting it down - citing the financial collapse of the company.

Smith-Griffin claimed the companys products were used in other major school districts including in New York City and Atlanta.

But the indictment, unsealed in Manhattan federal court on Tuesday, accused Smith-Griffin of misrepresenting AllHeres finances to investors enabling her to illegally collect millions of dollars from them since 2020. 

Smith-Griffin allegedly told potential investors that AllHere had generated approximately $3.7 million in revenue in 2020, had approximately $2.5 million in cash on hand and had major school district customers like the New York City Department of Education and Atlanta Public Schools, the New York U.S. Attorneys Office revealed.

However, authorities later found that the tech tycoon had only generated a meager $11,000 in revenue in 2020, had just $494,000 in cash and did not have contracts with many of the customers it represented.

Joanna Smith-Griffin, 33, of Raleigh, North Carolina , was arrested in her home state and charged with securities and wire fraud, along with identity theft on Tuesday

The 33-year-old Harvard graduate has also been accused of embezzling corporate funds for her own benefit as she allegedly used some of the fraudulently obtained funds to put a down payment on her house and pay for her wedding

Smith-Griffins alleged falsifications continued through the companys collapse, as she was was able to obtain nearly $10 million from investors and sought an additional $35 million from a private equity investor who ultimately decided not to invest. 

The 33-year-old has also been accused of embezzling corporate funds for her own benefit as she allegedly used some of the fraudulently-obtained funds to put a down payment on her house and pay for her wedding. 

Smith-Griffin has also been accused of generating a fake email account in an attempt to cover up her crimes. 

When investors and outside accountants accidentally uncovered discrepancies between the companys actual finances and what Smith-Griffin claimed, the mother-of-two used the fake email to pose as AllHeres outside financial consultant, as she shared fraudulent financial documents with her largest investor. 

AllHere filed for Chapter 7 bankruptcy liquidation in June and has since laid off all employees is now under the control of a court-appointed bankruptcy trustee.

U.S. Attorney Damian Williams said that Smith-Griffin 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.

It was not immediately clear who would represent her in an afternoon court appearance in North Carolina.

Created in 2016, the company manufactured Ed the chatbot - a product used by the Los Angeles Unified School District for a time before eventually shutting it down, citing the financial collapse of the company. Pictured: Los Angeles Unified School District Superintendent Alberto Carvalho officially launches Ed the chatbot

The mother-of-twos charges of wire and securities fraud each carry maximum sentences of 20 years in prison, while her aggravated identity theft charge, carries a mandatory sentence of two years in prison

James E. Dennehy, head of New Yorks FBI office, said she misrepresented the composition of her startup company and masqueraded as a financial consultant to perpetuate the scheme once discrepancies were discovered.

He also said her selfishly prioritizing personal expenses over the companys needs damaged the potential for improved learning environments across major school districts, according to the release.

Smith-Griffins charges of wire and securities fraud each carry maximum sentences of 20 years in prison, while her aggravated identity theft charge, carries a mandatory sentence of two years in prison.