Nancy New and Zach New of New Learning Resources Inc. have pleaded guilty to a series of federal charges including wire fraud and money laundering. They admit that they fraudulently acquired millions of dollars from the Mississippi Department of Education in reimbursement for special-needs education services and personally benefited from the money.
Both mother and son are two of the figures at the heart of the sprawling Mississippi Department of Human Services embezzlement case. That state case alleges that the News conspired with disgraced former DHS Executive Director John Davis and several others to divert and spend millions of dollars from the Temporary Assistance for Needy Families program, money intended to provide critical financial aid to low-income families.
Nancy New, owner of New Learning Resource Inc., which formerly operated several alternative private schools across Mississippi, including New Summit School in Jackson, pleaded guilty to “monetary transactions with the proceeds of a specified unlawful activity, that is, wire fraud.” That count carries a maximum penalty of 10 years in prison and a maximum fine of $250,000.
Zach New, her son and vice president of New Learning Resources, pleaded guilty to “conspiracy to commit the federal offense of wire fraud,” with a maximum penalty of five years in prison and a fine of up to $250,000.
In March 2021, the FBI filed the federal indictment against the News, detailing a litany of crimes including fraud, conspiracy, money laundering, and identity theft. “New Learning Resources, Inc., a for-profit company owned by Nancy New and Zachary New, fraudulently obtained in excess of two million dollars ($2,000,000) to which it was not entitled. Nancy W. New and Zachary W. New personally benefited from this scheme to defraud,” the indictment read in part.
The indictment went on to allege that the News filed fraudulent reimbursement claims for teachers who no longer worked at New Summit School, for employees of the school who were never teachers and for teachers who did work at the school but at a lower salary level than they were actually paid. Additionally, the federal charges claimed that the News filed reimbursement claims for students who had left the school and students who had simply never attended at all.
Neither the indictment nor the announcement of the News’ guilty pleas identified the fate of all the fraudulently obtained funds. But the indictment did include the detail that the News laundered $250,000 of the money before ultimately using it to purchase a house, property the News may quickly lose if a judge orders them to pay restitution for ill-gotten gains from the fraud.
State Auditor Shad White released a brief statement on social media Thursday after the announcement of the pleas. “My office was proud to continue our work with our federal partners to help achieve this result in this case,” White wrote.
But further comment from the auditor is unlikely. “The gag order in the upcoming state cases bars me and everyone else in those cases from making additional comments.”
Both Nancy and Zach New remain free on bond until their upcoming sentencing hearing on Nov. 19, 2022. They remain as defendants in the state case dealing with the alleged TANF embezzlement.
Disclosure: Nick Judin attended New Summit School and in 2006 served as a production assistant on a project filmed at the school in partnership with Mississippi Community Education Center.