Mother and son in Mississippi indicted on fraud charges
JACKSON, Miss. (AP) — A federal grand jury in has indicted a mother and son on wire fraud and other charges that accuse them of improperly obtaining millions of dollars from the state of Mississippi.
Nancy New 68, and Zachary New, 38, appeared in court Thursday in Jackson, hours after the indictments were unsealed. Each pleaded not guilty to all charges.
U.S. Magistrate Judge Keith Ball set a May 3 trial date, with U.S. District Judge Carlton Reeves set to preside. Ball also set a $10,000 unsecured bond, meaning Nancy New and Zachary New did not have to post money before being released.
One of Zachary New’s attorneys, Tom Fortner, said outside the courtroom: “I’m not even sure there’s a crime here.”
Nancy New’s attorney, Cynthia Speetjens, said her client is looking forward to the trial.
“I have seen nothing that would give any indication that Nancy New or her son are criminals — not even close,” Speetjens said after the brief hearing Thursday.
Nancy New was president and Zachary New was vice president of a for-profit company called New Learning Resources Inc. The company was also doing business as New Learning Resources School District, which has operated the private New Summit School in Jackson since 1997.
The indictments accuse both of the Nancy New and Zachary New of conspiracy to commit wire fraud by saying they created and submitted documents to the Mississippi Department of Education to receive state money to pay teachers at New Summit School, but some of the people were no longer teachers at the school or had never been teachers there. The indictment says the company fraudulently obtained more than $2 million from the state from 2017 to 2020.
Mississippi law allows some public education money to be paid to private schools for students with special academic needs. New Summit School has offered services for students with dyslexia and autism.
Nancy New and Zachary New were also indicted on charges of wire fraud, aggravated identity theft, money laundering and engaging in monetary transactions with proceeds of specified unlawful activity. Conviction on all the charges would carry up to 210 years in prison.
Nancy New and Zachary New said little in court as they answered questions from Ball. He instructed them to have no contact with anyone who might be a witness in the case, including current or former employees of New Summit School.
The federal indictments were issued more than a year after state Auditor Shad White announced that Nancy New, Zachary New, former Mississippi Department of Human Services executive director John Davis and three other people had been indicted on state criminal charges in what White called a “sprawling conspiracy” related to misspending of money in the Department of Human Services. White said in February 2020 that investigators believe at least $4 million in federal welfare money was stolen.
In a statement after the federal indictments were unsealed Thursday, White said: “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.”
This story has been corrected to show that conviction on all charges would carry up to 210 years in prison, not 220 years.