The Greenwood location of Families First for Mississippi was open for business Wednesday, but representatives declined to comment on what the arrest of its founder, Dr. Nancy New, might mean for the nonprofit that tries to wean the poor off government dependence.
They referred the Commonwealth to Amanda Barbour, an attorney with the Butler Snow law firm in Ridgeland. Multiple attempts were made to reach Barbour, but she was not available for comment.
Meanwhile, an affiliated organization also founded by New says that North New Summit School in Greenwood and its sister schools will remain open.
“It is our goal to continue providing the same innovative learning opportunities that our students, their parents, and the community deserve and expect without disruption,” New Learning Resources Inc. said in a prepared statement. “We have no plans to close or suspend operations of any school.”
The statement said, “The New family is currently transitioing out of the day-to-day operations of NLR.” It said the corporation soon would be naming an interim director.
Nancy New, a Greenwood native, is the owner and executive director of New Learning Resources as well another nonprofit, the Mississippi Community Education Center. MCEC is at the center of the welfare fraud scandal.
New and her son, Zach New, MCEC’s assistant executive director, were arrested last week in connection with what state officials are saying may be the largest public embezzlement case in Mississippi history. The State Auditor’s Office, which made the arrests, has estimated the fraud totaling at least $4.1 million.
The News are accused of converting federal welfare funding, funneled to them through the Mississippi Department of Human Services, to personal use.
Also arrested following an eight-month investigation were John Davis, the former director of DHS; former DHS employee Latimer Smith; Ann McGrew, an accountant who works for the News; and Brett DiBiase, a retired professional wrestler who later became a DHS employee.
All six were released on their own recognizance.
Attempts to contact the News since their arrest have been unsuccessful.
So far, all of the alleged embezzlement involved block grants awarded to the state through the Temporary Assistance for Needy Families (TANF) program. MCEC reportedly received $65 million in TANF money over the past five years, with most of that coming in the last couple of years. The money was intended to provide youth development, parenting education, workforce readiness, literacy promotion, addiction education and obesity education.
Although only the Department of Human Services has been tied up so far in the scandal, the Clarion Ledger has reported that other state agencies are looking into funding they awarded to Nancy New’s two organizations.
Over the past five years, according to the Jackson newspaper, the Mississippi Department of Education has directed $2.6 million to MCEC and more than $12 million to New Learning Resources, which in addition to North New Summit includes New Summit School in Jackson, South New Summit School in Hattiesburg, Spectrum Academy in Jackson and an online school. The money has been a mixture of private school vouchers, dyslexia scholarships and other state and federal money.
During a news conference on the day after the arrests, Gov. Tate Reeves, who filmed a television spot during his campaign last year at New Summit School, defended the work of the Jackson school, which specializes in educating special needs students.
“I can tell you, the teachers and students didn’t deserve to be caught up in all of this,” the Republican governor said.
The Mississippi Department of Health and the state Community College Board have also been reviewing the millions of dollars they have awarded to MCEC, the Clarion Ledger reported.
The MCEC bank account allegedly connected to the case has been frozen by a state judge at the request of State Auditor Shad White’s office, according to the newspaper.
The freeze could threaten the continued operation of the Families First centers in Greenwood and elsewhere.
“MCEC’s inability to access its funds will affect its ability to pay employees and will disrupt the provision of vital social services and community based services in 42 Mississippi counties,” the nonprofit argued in a court filing opposing the freeze.