Nancy New and her son Zach New reached deals Wednesday to plead guilty in a federal case involving $4 million in public school dollars prosecutors say they bilked for their private school.

The charges came from an investigation that uncovered what State Auditor Shad White called the “largest public embezzlement case in state history.”

Brookhaven resident John Davis, the former executive director of the Mississippi Department of Human Services, was indicted in 2020 on five charges connected with the case, including conspiracy, fraud and making false statements. He was indicted on 20 new charges in March, including nine counts of bribery, four counts of conspiracy to commit mail fraud, three counts of making fraudulent statements, two counts of conspiracy to commit fraud, and one count each of conspiracy to commit bribery and conspiracy to embezzle.

New, owner of the now-defunct New Summit School, a once popular private school that served students with special needs, pleaded guilty to one count of wire fraud, which comes with a possible prison sentence of up to ten years. Zach New, vice president for the private school district called New Learning Resources Inc., pleaded guilty to conspiracy to commit wire fraud, which carries a sentence of up to five years. They could each face fines up to $250,000. The sentencing is set for Nov. 19, 2022.

The joint federal indictment against the News, filed over a year ago, alleged they defrauded the Mississippi Department of Education out of $4 million in public education dollars by filing fake reimbursement claims. Nancy New pleaded guilty in that case, while prosecutors split off Zach’s charge in a separate bill of information, a document that is filed when a defendant agrees to plead guilty without the grand jury handing down an indictment.

The plea deals come on the heels of Mississippi Today’s “The Backchannel” investigation that reveals new details about former Gov. Phil Bryant’s involvement in a separate scandal involving the Mississippi Department of Human Services, in which the News are currently facing separate state charges. The recent plea agreements also come less than three weeks before the News were set to stand trial in the federal case.

In the state case regarding welfare theft, the Hinds County District Attorneys Office is accusing the News of embezzling more than $4 million in federal public assistance funds, $2.15 million of which prosecutors say they used to make personal investments in companies called Prevacus and PreSolMD.

Text messages newly uncovered by Mississippi Today reveal that right before the News agreed to funnel welfare money to Prevacus, the company’s owner and former NFL quarterback Brett Favre offered Bryant company stock in exchange for his help as governor — which Bryant agreed by text to accept after he left office. Favre even referenced in texts to Bryant the public funding that the company was receiving from the state and Nancy New. Bryant responded positively.