Mom, son swindled $2 million in taxpayer money for Mississippi private school, feds say
The founder of a private school in Mississippi and her son are accused of submitting fake reimbursement claims to get their hands on $2 million in state education dollars — some of which they used to buy a house, prosecutors said.
Nancy New, 67, and her son Zachary New, 38, were charged in a 17-count indictment with conspiracy to defraud, wire fraud, aggravated identity theft and money laundering, the U.S. Attorney’s Office for the Southern District of Mississippi said Thursday in a news release.
Zachary New and his mom, who founded New Summit School in Jackson, are accused of submitting the claims for reimbursement to the Mississippi Adequate Education Program through the state Department of Education.
MAEP is used to allocate funding for public schools, but some “nonpublic schools” may also request funding “to pay for special teacher teams to serve students with learning disabilities,” Mississippi Today reported.
A representative from New Summit School and defense attorneys for Nancy and Zachary New did not immediately respond to McClatchy News’ request for comment Friday.
It’s not, however, their first run-in with the law.
The News are ensnared in what the Mississippi state auditor previously described as “the largest public embezzlement scheme in state history” involving tens of millions of dollars in federal welfare funding that was allocated to nonprofits operated by Nancy New, Mississippi Today reported.
The alleged scheme extended to Pro Football Hall of Fame member and Gulfport, Mississippi, native Brett Favre, who was accused of receiving $1.1 million in welfare money from Nancy New’s nonprofit for speeches he never made.
Favre ultimately repaid the money, the Biloxi Sun Herald reported.
The alleged fraud
On New Summit School’s website, Nancy New describes the K-12 private school she founded in 1997 as “a full-time, co-educational school” with an emphasis “placed on keeping instructional groups small and teaching to the individual student in a positive and stimulating environment.”
Tuition ranges from $9,200 to $10,050, depending on grade level.
But according to prosecutors’ indictment unsealed Thursday, Nancy New and her son wanted more than just tuition money to finance the school while lining their own pockets.
Beginning in at least 2016, prosecutors said the pair sought reimbursement from the state Department of Education for teacher salaries on behalf of individuals who had stopped working at the school or held other jobs not as teachers. They are also accused of submitting a claim for someone who never worked at the school.
In addition, Nancy and Zachary New lied about the experience level and certifications teachers had to artificially inflate their salary level and get more money from the state, according to the indictment.
They also submitted claims for students who no longer went to the school or had never attended, prosecutors said.
In total, more than $2 million in taxpayer dollars reportedly was wired to New Learning Resources Inc., which prosecutors described as a for-profit company that Nancy and Zachary New owned.
The pair is also accused of laundering at least $250,000 through multiple bank accounts to finance a new house for Nancy New, the indictment states.
Prosecutors said the News had their first court appearance Thursday and are scheduled for trial in May. If convicted, they face up to 210 years in prison and up to $4 million in fines.
