Feds accuse New Summit private school leaders of bilking $2 million in Mississippi public school dollars

Story by Anne Wolfe, Mississippi Today

When agents arrested Nancy New and her son Zach New in 2020 on charges they allegedly stole $4 million in Mississippi welfare dollars, onlookers speculated how the popular private schools they ran, New Summit, may be implicated.

Now, the federal government is alleging the News also defrauded the Mississippi Department of Education out of $2 million they secured by filing fraudulent claims, sometimes on behalf of kids who didn’t attend the school, people who didn’t work at the school or teachers who had a lower certification level than they claimed.

Nancy New used at least $76,889 of the public school money to purchase her house in northeast Jackson, according to a series of bank transactions outlined in the indictment against her.

In a 12-page federal indictment unsealed Thursday morning, the News are accused of conspiracy to commit wire fraud, eight counts of wire fraud, five counts of aggravated identify theft, money laundering conspiracy and two counts of monetary transactions with proceeds of specified unlawful activity.

Nancy New did not return a call or text message from Mississippi Today on Thursday.

“MDE does not comment on investigations,” a spokeswoman for the Mississippi Department of Education told Mississippi Today on Thursday.

New Summit School, a private school that specializes in educating students with learning disabilities, long had the support of state leaders. During his 2019 campaign for governor, Gov. Tate Reeves filmed an ad at New’s private school, where he touted his proposed $4,300 pay raise for public school teachers. The News donated a total of $5,000 to Reeves in the past, money he later said he would return or donate.

Former Gov. Phil Bryant, who led the state during the scheme, lauded the work of Nancy New’s nonprofit, Mississippi Community Education Center, which ran a state sanctioned program called Families First for Mississippi.

In 2018, Bryant gave Nancy New the Mississippi Meritorious Civilian Service Award, the second highest honor the governor grants.

In his final State of the State address in January 2019, then-Gov. Phil Bryant boosted her organization’s role in “helping to restore and support the entire family.”

In 2016, Bryant and his wife, Deborah, stood shoulder-to-shoulder with Nancy New and Davis, a Bryant appointee, at the ribbon cutting ceremony for the original Families First office in Jackson.

“The Families First platform has become a model of success for thousands of Mississippians and one that is being emulated all across America,” Bryant said in the 2019 address.

The News were two of six people agents from the state auditor’s office arrested on Feb. 5, 2020, alleging they conspired to steal more than $4 million in federal block grant funds intended to help Mississippians escape poverty.

Prosecutors filed those charges, related to Mississippi Department of Human Services, in Hinds County Circuit Court. This week’s newly revealed charges related to the alleged Mississippi Department of Education scheme appear in the U.S. District Court for the Southern District of Mississippi.

“I am proud of the joint work we have done with federal investigators that led to this indictment,” State Auditor Shad White said in a statement Thursday regarding the federal charges. “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.”

About half — $2 million — of the allegedly stolen money outlined in the Hinds County indictment went to the News personally, with $2.15 million going to concussion-research firms, Prevacus and PreSolMD, companies that state leaders were trying to lure to Mississippi.

Several million more in questioned spending has not appeared in criminal charges.

Mississippi Today first reported that the New nonprofit paid $5 million for the construction of a new volleyball stadium at University of Southern Mississippi; covered the $9,500-a-month mortgage on former football star Marcus Dupree’s ranch in a gated Flora community; and funded a high-profile boot camp-style fitness program offered by former linebacker Paul Lacoste. A state audit released in May included each of these purchases as a finding.

Former professional wrestler Brett DiBiase, who allegedly went to drug rehab on the TANF program’s dime, pleaded guilty in December. The New nonprofit’s accountant, Ann McGrew, tried to plead guilty but a judge rejected the deal in January.

The remaining four — Nancy New, Zach New, former Mississippi Department of Human Services director John Davis and agency employee Gregory “Latimer” Smith — remain innocent until proven guilty. Trials are set for coming months, but additional delays are likely.

No one else who received roughly $94 million in questionably spent welfare funds has been charged with a crime. It’s possible that if they had no knowledge of the overarching scheme or the source of the funds, they may not be accused of wrongdoing, officials have explained to Mississippi Today.

This story will be updated. View a timeline of events associated with the welfare fraud scheme here.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.