Two of the defendants in the largest embezzlement case in state history now face an additional 17-count indictment for allegedly defrauding the Mississippi Department of Education to the tune of $2 million.
The unsealed indictment charges Nancy New and her son, Zachary, with 17 counts of conspiracy to commit wire fraud, wire fraud, aggravated identify theft & money laundering. As the president and vice president of New Learning Resource—the nonprofit that operated New Summit School—Nancy and her son are accused of falsely claiming reimbursements for teacher salaries and students at the school that serves students with disabilities beginning in 2016.
Additional claims in the indictment accuse the News of transferring state funding to personal accounts on several occasions, including the use of state funds for a Jackson home.
The full list of allegations, outlined by the U.S. Attorney’s Office, can be found below:
- false claims that individuals who no longer worked at New Summit School had continued to work there as teachers;
- false claims that individuals who were working at New Summit School in another capacity were working as teachers;
- a false claim that at least one individual who had never worked at New Summit School worked as a teacher there;
- false claims that the experience level and certification level of teachers at New Summit School were higher than they actually were, resulting in reimbursement at an artificially higher salary level;
- false claims that students who no longer attended New Summit School continued to attend school there; and
- false claims that individuals who had never attended New Summit School in Jackson were full-time students attending school at New Summit School.
- The indictment alleges that, in one instance, Nancy New and Zachary New laundered approximately $250,000 of the fraudulently obtained reimbursement money through different bank accounts they controlled before finally using the proceeds to purchase a house.
The News pled not guilty during their initial appearance and a trial is scheduled for May. If convicted, they each face up to 210 years in federal prison and up to $4,000,000 in fines.
Outside of the courtroom, Zachary New’s attorney Tom Fortner, told Emily Wagster Pettus with the Associated Press, “I’m not even sure there’s a crime here.” Nancy New’s attorney, Cynthia Speetjens, told the AP that she is “looking forward to the trial.”
Nancy and Zach New are among the six suspects arrested in February 2020 in relation to the alleged embezzlement scheme involving the misuse of TANF funds within the Mississippi Department of Human Services. The other suspects arrested include former DHS Executive Director John Davis, former DHS employee Latimer Smith, Anne McGrew, an accountant for the Mississippi Community Education Center and Brett DiBiase.
“I am proud of the joint work we have done with federal investigators that led to this indictment. We are continuing to work shoulder-to-shoulder with our federal partners to advance this case, and today is another step toward justice for the taxpayers,” State Auditor Shad White said after the indictment was unsealed.
DiBiase, a former pro wrestler, pled guilty to one count of making false statements for the purpose of defrauding the government. Through the Mississippi Community Education Center and the Family Resource Center of North Mississippi, a pair of non-profits, TANF funds were allegedly used to pay for DiBiase’s stay at a luxury drug rehab facility in Malibu despite claiming that he was being paid to teach classes about drug abuse.