Nancy and Zach New attempted to get $400k from Tupelo nonprofit through civil lawsuit

·3 min read

Aug. 5—JACKSON — While Nancy New and her son Zach New were in the middle of combating allegations of misusing federal funds in a sprawling welfare scandal, their private school district tried to force a Northeast Mississippi nonprofit to pay them nearly $500,000.

New Learning Resources, a now-defunct private school district operated by the News in Jackson, filed a lawsuit in Lee County Circuit Court in February 2021 against the Family Resource Center, a nonprofit located in Tupelo, over a contract dispute related to online learning services.

New Learning Resources, according to the lawsuit, in 2016 entered into a licensing agreement with the resource center to provide a license to the FRC to use NLR's online high school diploma programs. In return, the FRC was supposed to pay NLR a monthly fee based on the number of people enrolled.

The documents state the FRC initially paid the monthly bills to the school district, but it eventually stopped issuing payments altogether to the Hinds County organization. Leaders of the district allegedly tried to resolve the dispute by reaching out to FRC Director Christi Webb about the discrepancy.

The lawsuit states Webb emailed representatives of the private school district on Oct. 17, 2019 saying, "Know that we will pay you!!...I will pay all we owe. Thanks for being patient with us !!!"

But New Learning Resources purports that Webb never paid the approximately $487,000 in outstanding bills.

The Lee County organization, though, argues in court filings that no such agreement ever existed with New Learning Resources and denies several of the claims alleged by the school district.

Just as parties in the case began to testify in sworn depositions, the school district asked a judge to temporarily pause the litigation. Both the FRC and Circuit Judge Michael Mills Jr. agreed to the request.

Mills ordered the case to temporarily pause and for the pending deadlines in the suit to be suspended. The case was initially paused until April 1, but Mills extended the freeze until Nov. 1.

Casey Lott, a Booneville-based attorney representing the FRC, told the Daily Journal that the Lee County nonprofit wanted Nancy New to sit for a deposition, but her attorneys weren't receptive to that idea because her testimony could have been used as ammunition against her in other criminal cases.

"We also didn't think it would be very useful for her to invoke the Fifth Amendment every time we would have asked her a question (in the deposition)," Lott said.

The attorney representing New Learning Resources did not respond to a request for comment.

Court documents, though, show Webb appeared for a deposition in the suit on Nov. 3. Neither a full nor a partial transcript of her testimony has been submitted in the court record for public viewing.

Nancy New, in a separate criminal case, pleaded guilty to one count of using proceeds of wire fraud, or money laundering, which comes with a possible prison sentence of up to 10 years. Zach New, vice president for the private school district, pleaded guilty to conspiracy to commit wire fraud.

State officials are suing both the News and the FRC over allegedly misspending millions of dollars in federal grant money intended to help the poor. Lott, FRC's legal counsel, has denied that the nonprofit has done nothing wrong and has not intentionally misspent any federal welfare dollars.

No FRC employee, including Webb, has been charged with any criminal wrongdoing.