The federal investigation into the Los Angeles Unified School District superintendent, whose home and school office were raided Wednesday, may be tied to a failed multimillion-dollar AI school contract involving a potential conflict of interest.

Alberto Carvalho previously awarded a $6 million contract, paying $3 million up front, to education technology company AllHere. 

A former salesperson employed by the firm also had her Miami property raided the same day as Carvalho, according to public records cited by the Los Angeles Times. The woman, Debra Kerr, reportedly had close ties to Carvalho during his tenure leading Miami-Dade County Public Schools.

Spokesperson Jim Marshall confirmed to local media Miami Herald that "we searched a residence in Southwest Ranches today as part of this matter and have since cleared the scene."

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In 2023, Carvalho secured a contract with AllHere to develop an AI chatbot called "Ed," designed to help address student issues such as absenteeism.

It ultimately collapsed in 2024 after its founder, Joanna Smith-Griffi, was accused of embezzling funds amid data privacy risks and whistleblower concerns. She was later charged with securities fraud, wire fraud and identity theft.

Kerr further claimed in AllHere's bankruptcy court filings that the company owed her commissions for helping secure its deal with LAUSD, according to education-focused outlet The 74. 

While federal officials confirmed that search warrants were conducted Wednesday, they declined to reveal the nature of the investigation, noting that the warrants remain under seal.

However, sources told the LA Times that the investigation fell under the broad category of financial issues, and that the raid focused on Carvalho rather than the California school district.  

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LAUSD released a statement saying the district is fully cooperating with federal officials.

"The LAUSD Board of Education understands that today’s news has raised questions across our school communities," it said. 

"The Board’s priority remains ensuring that our students, families, and employees experience a safe and welcoming learning environment. Teaching and learning continue across our schools. Los Angeles Unified continues to stay focused on our responsibility to serve students and our families."

The superintendent has led the nation’s second-largest school district since 2022, overseeing the education of roughly 400,000 students. He was also unanimously reappointed to the position in September 2025.  

Before moving to California, he spent 14 years leading Miami‑Dade County Public Schools, the nation’s fourth-largest school district. 

Wednesday’s raids mark the latest controversy to engulf Carvalho.

In 2020, he helped secure a $1.57 million donation from a company that had a pending contract with the district, the Miami Herald reported.

The funds reportedly went to an education nonprofit he founded, and the company’s online learning program, which was ultimately plagued with problems, was quickly scrapped.

In June 2021, the school’s inspector general determined that the donation, intended to benefit teachers, did not violate any policies but created the "appearance of impropriety," the outlet said. The foundation was subsequently urged to return the funds, which reportedly had been distributed to teachers as $100 gift certificates.

The Federal Aviation Administration (FAA) restricted flights Thursday near Fort Hancock, Texas, after a U.S. Customs and Border Protection (CBP) drone was reportedly shot down by a laser sytem operated by the Pentagon.

While government agencies have not identified who the drone belonged to, top Democrats on the Transportation and Infrastructure Committee released a joint statement Thursday evening claiming the drone belonged to CBP.

U.S. Reps. Rick Larsen, Bennie Thompson and Andre Carson said their "heads are exploding over the news" that a CBP drone was shot down by the Pentagon with "a high risk counter-unmanned aircraft system."

The legislators added that this incident is "the result of [the White House's] incompetence" after a "short-sighted" decision to "sidestep a bipartisan, tri-committee bill to appropriately train C-UAS operators and address the lack of coordination between the Pentagon, DHS and the FAA."

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In a joint statement provided to Fox News Digital, the Department of War, CBP and the FAA said the DoW used counter-unmanned aircraft system to respond to a "seemingly threatening unmanned aerial system operating within military airspace."

The departments said the engagement took place "far away from populated areas and there were no commercial aircraft in the vicinity," adding they "will continue to work on increased cooperation and communication to prevent such incidents in the future."

The departments said they are "working together in an unprecedented fashion to mitigate drone threats by Mexican cartels and foreign terrorist organizations at the U.S.-Mexico border."

"The bottom line is the Trump Administration is doing more to secure the border and crack down on cartels than any administration in history," the statement added.

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Congressional aides told Reuters that the Pentagon reportedly used the high-energy laser system to accidentally shoot down the CBP drone near the Mexican border, an area that frequently sees incursions from drones believed to be operated by Mexican drug cartels.

The FAA told Fox News Digital that a temporary flight restriction (TFR) was "already in place" around the Fort Hancock area and that the TFR "has been expanded to include a greater radius to ensure safety." 

The restriction does not impact commercial flights, the agency said.

The FAA said in a Notice to Air Missions (NOTAM) that airspace around Fort Hancock was temporarily restricted for "special security reasons."

The restriction comes a couple of weeks after the FAA grounded flights to and from El Paso International Airport for 10 days before lifting the order roughly eight hours later.

A Trump administration official previously told Fox News that the initial lockdown came in response to "Mexican cartel drones" that breached U.S. airspace.

A U.S. official later confirmed that the U.S. military had shot down what was later determined to be a party balloon near El Paso.

Fox News Digital reached out to the White House for comment and was directed to the joint statement provided by the Department of War, Customs and Border Patrol and Federal Aviation Administration.

Fox News Digital's Anders Hagstrom and Reuters contributed to this report.