A federal grand jury entered a new indictment in the case of Nancy and Zach New on Tuesday, doubling the amount that the mother-son owners of a Mississippi private school district are accused of stealing from federal education funds.
The indictment, released on Thursday, replaces an earlier one from March.
The new indictment included four new counts of aggravated identity theft and increased the amount of “fraudulently obtained” funds to $4 million from $2 million in the previous indictment. If convicted of all charges, the News could each face up to 218 years in prison and $5 million in fines.
The News are accused of filing fraudulent claims with the Mississippi Department of Education for special education scholarships and reimbursements on behalf of students who no longer or had never attended their schools, teachers who no longer worked at their schools, or claiming that teachers had higher certifications than they did.
The new indictment also specifically names North New Summit in Greenwood and South New Summit in Hattiesburg as facilities that the News were submitting fraudulent reimbursement claims on behalf of. It also alleges that claims were submitted for three years falsely showing that Nancy New was working full-time as a teacher at New Summit School, resulting in a salary reimbursement of $67,000 for each of those years.
All of the original charges were also included in this new indictment. Those charges were conspiracy to commit wire fraud, eight counts of wire fraud, money laundering conspiracy, money transactions with unlawfully acquired funds, and five additional counts of aggravated identity theft.
The Mississippi Department of Education was contacted for comment but had not responded at the time of publication.
As the new charges have been announced, teachers at several New Summit schools have been laid off as the schools do not have the money to make payroll, a signal that they will likely close permanently.
The New Learning Resources School District focused on providing specialized services for students with behavioral or learning disabilities. As a private school group with public accreditation from the Mississippi Department of Education, schools in the district are funded through a combination of tuition payments and Education Scholarship Accounts, a voucher that allows public school dollars to follow special needs students to private schools.
Both teachers and parents interviewed by Mississippi Today say that New Summit School has been an invaluable resource to the students with learning disabilities enrolled there. The federal and state charges have created uncertainty and anxiety for the parents of current students, leading to a group of parents working to have New Summit School transferred into a custodianship so that it could remain operational. At this time, it is unclear if they will succeed in keeping the school open.
Nancy and Zach New have not been arraigned for these new charges, but they both pleaded not guilty to the previous indictment in March.