The promise of artificial intelligence in education offered by a startup company founded at Harvard was apparently misused for personal gains, which eventually led to millions in investor fraud losses.
Federal authorities arrested Joanna Smith-Griffin, founder and chief executive of AllHere Education, Inc., an AI-driven edtech startup. She has been charged with securities fraud, wire fraud, and identity theft. Allegations include inflating the company’s financial health to secure investments, deceiving stakeholders, and misusing funds for personal gain.
Misrepresentation and Deception Led to Investor Fraud
Founded at Harvard, AllHere aimed to use AI to improve student attendance and engagement in K-12 schools. Prosecutors allege that Smith-Griffin misled investors during the company’s Series A funding round in late 2020. She claimed the company had generated $3.7 million in revenue that year and secured partnerships with major school districts like the NYC Department of Education and Atlanta Public Schools.
In reality, the indictment reveals, AllHere only earned $11,000 in 2020, held $494,000 in cash, and had no contracts with the school districts cited. These false claims helped Smith-Griffin secure nearly $10 million in investments between 2020 and 2024.
Fraudulent Financial Documents
When discrepancies between actual and reported financials emerged, Smith-Griffin allegedly doubled down on her scheme. Prosecutors accuse her of creating a fake email account for AllHere’s financial consultant, using it to distribute fraudulent financial documents to investors.
One investor narrowly avoided additional losses after uncovering inconsistencies during a review of the company’s records. By this point, Smith-Griffin had already sought $35 million in private equity funding, though the deal fell through.
Personal Gains Amid Bankruptcy
As the company unraveled, Smith-Griffin reportedly used investor funds for personal expenses, including a down payment on a North Carolina home and her wedding. AllHere ultimately declared Chapter 7 bankruptcy, resulting in the loss of all jobs within the company and the appointment of a court-ordered bankruptcy trustee to manage its remaining assets.
Federal officials said suggested broader implications of the alleged fraud. “Her actions affected the potential for improved learning environments in major school districts, prioritizing personal expenses over public benefit,” said FBI Assistant Director James Dennehy.
The collapse of AllHere shows the risks of unchecked claims in tech startups, particularly those in emerging fields like AI. Fraudulent activity not only jeopardizes investor trust but also impacts communities relying on promised innovations.
Smith-Griffin faces severe penalties if convicted. Charges include securities fraud and wire fraud, each carrying a maximum 20-year prison sentence, as well as aggravated identity theft, which mandates a two-year minimum sentence.
