The founder and former chief executive of the now-defunct Early Learning Neighborhood Collaborative (ELNC), Nkechy Ezeh, has agreed to plead guilty to federal charges of wire fraud and tax evasion, bringing a legal turning point to a case that has spanned years of allegations, denials and litigation over the collapse of the organisation.

Court records show that Ezeh, a Nigerian, who established ELNC to support early childhood education programmes in vulnerable communities across Grand Rapids, Kalamazoo and Battle Creek, reached a plea agreement with federal prosecutors to avoid indictment by a grand jury.

She is scheduled to formally enter her guilty plea on January 14 before US District Judge Hala Jarbou in Lansing.

Under the agreement, Ezeh admitted conspiring with others to defraud the nonprofit of about $1.4 million, including funds from the US Department of Health and Human Services’ Early Head Start programme and private donors. Prosecutors said she also failed to report personal and business income between 2017 and 2022, leading to additional tax losses of about $390,000.

According to the plea documents, the stolen funds were used for personal expenses, including international travel to destinations such as Hawaii, Liberia and Nigeria. Investigators said Ezeh directed her former bookkeeper, Sharon Killebrew, to generate fictitious invoices for goods and services never provided and to channel money to Ezeh, her company and others acting at her direction. In one instance, Ezeh allegedly instructed that a nonprofit be incorporated using the stolen identities of three individuals.

Killebrew, 70, has already been sentenced to four years and six months in prison after pleading guilty to conspiracy to defraud a federally funded programme and tax evasion. Prosecutors said she and Ezeh worked together to embezzle more than $1.17 million.

In a statement issued through her lawyer, Mary Chartier, Ezeh said, “Ms Ezeh is committed to taking full responsibility and accountability for her actions. She is deeply remorseful to anyone who has been negatively impacted.”

The ELNC board welcomed the development, describing it as a step towards accountability after years of uncertainty following the organisation’s collapse.

“The millions of dollars taken from ELNC forced the organisation to close its doors and deprived children in Grand Rapids, Kalamazoo and Battle Creek’s poorest neighbourhoods of essential early childhood services needed to prepare them for kindergarten success,” the board said. It added that the plea and eventual sentencing would bring “accountability and justice”.

Ezeh, who founded ELNC around 2011, had previously denied wrongdoing. In 2023, when the organisation sued her and Killebrew for allegedly embezzling hundreds of thousands of dollars, her legal team described the claims as false and retaliatory. At the time, her lawyers said she had been wrongfully terminated and accused the organisation of attempting to strip her of intellectual property linked to the “Empowering Parents Impacting Children” (EPIC) model, which underpinned ELNC’s work.

Her representatives also rejected claims that she had fled the United States, insisting she remained in western Michigan and intended to contest the allegations in court. The civil lawsuit alleged that ELNC funds were routed through affiliated entities and consulting firms linked to Ezeh, a claim she previously disputed.

Federal prosecutors now say Ezeh has accepted responsibility for her role as the organiser of the scheme. The wire fraud charge carries a potential sentence of up to 20 years in prison, while tax evasion carries a maximum penalty of five years. As part of the plea agreement, she has agreed to pay restitution covering both the losses to ELNC and unpaid taxes.

The closure of ELNC in 2023 disrupted early childhood programmes serving some of Michigan’s poorest communities, prompting other agencies, including Kent Intermediate School District and First Steps Kent, to step in to maintain services. The board of the former nonprofit said the plea marked an important step towards closure after nearly three years of investigations and legal battles.