Wednesday, February 5, 2020, 5:38 pm
News Flash Archive
A Hinds County Grand Jury indicted six people for a multi-million dollar embezzlement scheme involving TANF funds. Former Department of Human Services chief John Davis, and Dr. Nancy New and her son Zach New, were among the six people indicted and arrested by special agents of the Auditor's office.
Also indicted were DHS employee Latimer Smith, Annie McGrew (the News' accountant), and Brett DiBiase.
Dr. Nancy New is the founder of Greenwood's North New Summit School, and according to the school's website, Zach New is the Executive Director of the school.
Dr. Nancy New operates a number of companies, including Mississippi Community Education Center (MCEC), New Learning Resources Inc., Mississippi Dyslexia Center Inc., Autism Spectrum Centers of Mississippi Inc, New Summit School LLC, and a number of other non-profit and for-profit companies.
According to the North New Summit School website, "North New Summit School is a part of New Learning Resources School District that also encompasses New Summit School, South New Summit School, Spectrum Academy, Oxford University School, New Learning Resources Online, and Mississippi Dyslexia Centers."
The alleged embezzlement scheme was uncovered by State Auditor Shad White's office, and has been under investigation for eight months.
TANF funds are administered by the Department of Human Services, and are meant to provide assistance to needy families.
According to the State Auditor, the embezzlement scheme is the largest ever uncovered involving public funds in the state.
Specifically, according to the State Auditor:
Davis and Smith stand accused of fraudulently manufacturing documents to enrich Brett DiBiase using TANF money. Davis and Smith created invoices to pay DiBiase TANF funds for teaching classes about drug abuse, but DiBiase was in a luxury rehabilitation facility for his own drug use in California at the time and did not perform the services. Davis and Smith created documents and arranged payment knowing DiBiase was not performing the work he was hired to perform.
Nancy New and her son, Zach New, stand accused of using the News' non-profit, MCEC, to pay for DiBiase's drug treatment using TANF funds. At Davis' direction, MCEC used TANF money received from DHS to pay for DiBiase's opioid treatment at the Rise in Malibu facility. The documentation submitted by the News claimed this was to pay DiBiase for conducting training classes that never, in fact, took place.
The News also stand accused of transferring millions in TANF funds to their private businesses. They then converted funds to their personal use and concealed the conversion through various fund transfers, fraudulent documents, at least one forged signature, and deceptive accounting measures.
Finally, Davis and the News are accused of creating a fraud scheme to take TANF funds to pay for personal investments in medical device companies (Prevacus, Inc., and PreSolMD, LLC) in Florida.
The Auditor reported that the investigation is still ongoing, as the total amount of taxpayers' funds allegedly stolen has not been fully determined.
The News and the other four indictees are, of course, considered innocent until proven guilty in a court of law.
The State Auditor's full announcement can be viewed here:
State Auditor Statement
John Pittman Hey
The Taxpayers Channel
News Flash Archive