School AI chatbot creator charged with $10 million fraud

The laminitis of an artificial quality startup who promised to amended schoolhouse attendance with an AI chatbot was arrested Tuesday and charged with fraud.

Joanna Smith-Griffin, 33, was detained successful North Carolina connected two fraud charges retired of Manhattan Federal Court.

Smith-Griffin was the founder of AllHere Education, a institution that promoted its ain AI-powered chatbot called “Ed.” Smith-Griffin and AllHere said the chatbot would assistance amended schoolhouse attendance by notifying parents if their kid wasn’t successful school.

The chatbot was besides pitched arsenic a companion for students, who would assistance them with world problems and prosecute them successful “conversation.”

The second-largest schoolhouse territory successful the country, Los Angeles Unified, signed a $6 cardinal declaration with AllHere to bring “Ed” to schools.

But Smith-Griffin told investors she was moving with different large districts — including New York City Public Schools — that had nary contracts with AllHere, according to national investigators. She besides misrepresented the company’s financials, claiming $3.7 cardinal successful gross successful 2020 erstwhile AllHere really generated conscionable $11,000, the feds said.

Duped investors gave Smith-Griffin astir $10 million, immoderate of which she spent connected a down outgo for a location successful Raleigh, N.C., and connected her wedding, the Justice Department said.

Once touted connected the Forbes 30 Under 30 list successful 2021, Smith-Griffin was forced retired of AllHere successful June 2024 arsenic the institution collapsed and filed for Chapter 7 bankruptcy. She present faces up to 40 years successful prison.