2 now face federal charges in multi-million dollar embezzlement scheme
JACKSON, Miss. (WLBT) - Two people arrested in connection with the largest public embezzlement scheme in Mississippi history now face federal charges.
In February 2020, six people were arrested in the embezzlement scheme. This included John Davis, the former Director of the Mississippi Department of Human Services; former DHS employee Latimer Smith; Dr. Nancy New, owner and Director of the Mississippi Community Education Center (MCEC) and New Learning, Inc.; Zachary New, Assistant Executive Director of MCEC; Anne McGrew, accountant for MCEC; and Brett DiBiase.
The group accounted for more than $4 million in embezzled government money, court documents revealed.
Nancy New was the owner and Mississippi Community Education Center, while Zachary was assistant executive director.
Prosecutors say the News converted funds from MCEC to several other bank accounts. That money was then used to invest in Prevacous and PresolMD, which were owned by the two. The investments totaled more than $2 million.
More than a year later, new federal court documents show Nancy and Zachary New now face federal charges.
Court records show money was being transferred into the bank account of New Learning Resource, Inc. between March 2017 and May 2020. NLR was a for-profit Mississippi Corporation also doing business as New Learning Resources School District. Nancy was president and Zachary was vice-president.
Prosecutors claim the News created fraudulent claims through the state as “reimbursement for the salaries at NSS (New Summit School) in Jackson that the co-conspirators fraudulently claimed to be qualified for reimbursement under the Mississippi Adequate Education program.”
These false claims included people who no longer worked at NSS, were not working there as teachers, or had never worked there at all.
More than $2 million was claimed in this way.
The two now face federal charges for conspiracy to commit wire fraud, eight counts of wire fraud, five counts of aggravated identity theft and one count of money laundering conspiracy.
State Auditor Shad White released a statement after the charges were announced:
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