The Hinds County District Attorneys Office is asking a grand jury to consider new information gathered during its investigation into Nancy and Zach New, figures in Mississippi’s welfare scandal.
The state has also asked Hinds County Circuit Court Judge Faye Peterson to postpone the New case, which is set for trial on Feb. 7, to give the grand jury enough time to convene.
The recent motion suggests that the state expects a grand jury to hand down new criminal indictments against the News, which are likely to have many parallels to the first.
Meanwhile, attorneys for the News wrote a scathing 12-page motion accusing State Auditor Shad White, who originally investigated the case, of attempting to try their case in the media.
“Auditor White’s statements went beyond the information contained in the indictments and instead amounted to character attacks and assurances that those charged were indeed guilty,” the attorneys wrote. “White’s emphasis on ‘influential people,’ ‘politically connected’ persons, and allegations of stealing from the poor for personal gain gave the story special pique and media saturation across Mississippi.”
Attorneys for another defendant in the scheme, former welfare director John Davis, made similar arguments in his case recently.
The News’ motion asks the court to suppress White from speaking to the media — even though there is already a gag order in the case — and also asks the judge to move the trial, known as a change of venue, “due to the relentless actions taken by the State Auditor to poison the jury pool.”
The auditor’s office declined to comment for this story.
Nancy New, a Greenwood native, founded New Summit School in Jackson, which has closed, and North New Summit School in Greenwood, which is now named Leflore Christian School and is under new leadership.
A Hinds County grand jury first accused the News in 2020 of each defrauding the state and embezzling more than $4 million in federal dollars their nonprofit Mississippi Community Education Center received from Mississippi Department of Human Services. A year later, a grand jury combined their charges into one case.
The News are also facing separate federal charges related to public school funds they allegedly bilked from the government for their private schools. Most recently, U.S. District Court Judge Judge Carlton Reeves set trial in that case for May 9.
The state criminal charges address just a fraction of a sprawling alleged scheme that resulted in $70 million wasted or misspent, according to auditors. Though the money was supposed to help the poor and prevent poverty, much of it enriched the friends and families of powerful officials.
In October, a forensic audit revealed new details about the state’s welfare spending, but because the News did not cooperate with the audit, the accountants could not parse out exactly what happened to $40 million the New nonprofit spent. The public still doesn’t know where millions went.
“The State of Mississippi has conducted a through (sic) investigation of the financial and corporate records of the Defendant Nancy New, her Co-Defendant, Zachary New, as well the various corporations in which those defendants hold either ownership or directorship interests or positions in,” the state’s latest motion reads. “…additional involvement of a Hinds County Grand Jury is necessary to address specific instances of potential criminal conduct … which may result in a superceding (sic) indictment.”
What makes the New case so complicated is the manner in which they kept their books. The News had several bank accounts for each of the family’s ventures — from Mississippi Community Education Center to New Learning Resources, most well known as New Summit School, to New Learning Resources Online to Spectrum Academy and private LLCs, such as 204 Key or Avalon Holdings, which shared a $6 million commercial loan with NLR, documents show. The nonprofit MCEC was the one receiving the welfare funds, but in their accounting, fund sources were co-mingled. Over the last two years, welfare agency officials and the auditor’s office have expressed difficulty following the money.
Prosecutors allege the News took welfare money from their nonprofit to make personal investments of over $2 million into a biomedical startup that was trying to develop a new drug to prevent the damaging effects of concussions. The companies, Prevacus and PreSolMD, were started by Florida scientist Jake Vanlandingham. Brett Favre had endorsed and invested in the companies. The former NFL quarterback even hosted meetings at his house with welfare officials and the scientist, during which they came up with the deal.
Vanlandingham promised the News a 2% share “and getting paid regularly,” and Zach New told Vanlandingham to put the stock in the name of N3 LLC, public records show. Vanlandingham told Mississippi Today in 2020 that while he knew the nonprofit was associated with a public grant, he had no idea their money came from the federal welfare program.