The announcement came from the office of Mississippi State Auditor, Shadrach Tucker White. Gov. "MDHS would like to thank the Office of the State Auditor investigators for their diligent work in seeing this investigation through," the post said. Davis attorney argues that when White and Anderson have discussed the case with the media, they have focused solely on Davis actions and not the several other employees who approved various purchases or the agency policies that he argues sanctioned Davis conduct. Copyright 2020 WLBT. Editor's Note: This is Part 1 of a three part series NEMISS.NEWS will publish regarding the matter the state auditor has called the biggest embezzlement of public funds in Mississippi history. (WLBT) - It was one week ago that the news broke of whats been called the largest public embezzlement case in state history. However, in saying that, we want to be good stewards of all financial support. You may opt-out by. Mississippi welfare embezzlement scandal: What we know so far. The complexity of the cover-up was as such that it wouldve been highly unlikely that anybody wouldve uncovered it, except by being able to find it from within, Blanton said. People may have identified or suspected that something was amiss but, because of the atmosphere of fear and intimidation, they were afraid to say anything for fear of losing their jobs, noted Blanton. He resigned in July 2019, at about the same time the auditor's office began its investigation. The total amount of money lost to the schemes has not yet been determined but the loss already exceeds any embezzlement scheme in the records of the auditors office, White said. There was a reception area, a 10 x 10 room with two tables and 6 chairs and another office. On a separate visit, she said, they found no employee present. State auditors said Ms. New and Mr. New concealed the embezzlement using fund transfers, fraudulent documents, at least one forged signature and deceptive accounting measures. We moved quickly and quietly in the auditors office to put a stop to the DHS scheme before any more money was taken, and now is the time to use every investigative resource available to uncover all the fraud that remains., The story about the MDHS scandal first broke late Wednesday afternoon, Feb. 5, 2020. As we do with all of our partners that receive Families First funding through Mississippi Community Education Center, we evaluate their services and outcomes and review their expenses, New wrote. Their own outcome reports that they sent the state each month, which were meant to show how many people they served, contained nonsensical figures, Mississippi Today first reported. Send any friend a story As a subscriber, you have . Anna Wolfe, a native of Tacoma, Wa., is an investigative reporter writing about poverty and economic justice. Show your support>>. Theres a lot of flexibility given for how states use TANF funds. Jones said as a result of the lost funding, 100 Black Men had to cancel some upcoming afterschool and ACT prep programs, but that they would continue other services, such as administering vaccines and a student field trip to Alabama. Follow him on Twitter @gbolognaCL. All persons arrested by the Mississippi Office of the State Auditor are innocent until proven guilty in a court of law. State agencies must improve when it comes to cybersecurity, Your California Privacy Rights / Privacy Policy. Mr. White said the arrests stemmed from an eight-month investigation into the misappropriation of funds from the Temporary Assistance for Needy Families program, which the state welfare agency administers. According to the auditor's office, there are at least six people involved, though the investigation is ongoing. Newis accused of using TANF funds for her personal use as well as for investing in private medical device companies. Former Green Bay Packers Quarterback and Hall of Famer Brett Favre has been accused of using his "special access" to former Mississippi Gov. Indictments were not found on the electronic courts site for Hinds County. Shortly after last years arrests in the largest reported public embezzlement scheme in state history, a whistleblower disclosed several previously unreported fraud allegations to the welfare department regarding one of its federal grant recipients. All rights reserved. Davis may face trial in September. Brett DiBiase has pleaded guilty for his role in an embezzlement scheme that investigators said was the largest in state history.The former pro wrestler was arrested in July 2019 along with several others, including former Mississippi Department of Human Services Director John Davis.DiBiase entered a guilty plea Thursday in Hinds County Circuit Court to making fraudulent statements for the . "Thats to create the transparency. Nancy New and her son, Zach New, stand accused of using the News nonprofit, MCEC, to pay for DiBiases drug treatment using TANF funds, White said. You cant edit our stories, except to reflect relative changes in time, location and editorial style. After DHS employees reported their findings to the Governor, the State Auditor was notified and the investigation was launched. The funds were instead taken by a group of influential people for their own benefit, and the scheme is massive. Johnson said, "I never had any problems prior to that. Wooten pushed back on this argument, repeatedly asking the attorney representing White and Anderson from the state attorney generals office how the gag order prevents White from doing his job, namely auditing and investigating government spending. To learn more about our cartoon syndication services. All TANF funds will go through the RFP process, Blanton said. Former DHS director, wrestler arrested in 'largest public embezzlement case in state history'. Connecting the dots: the MDHS embezzlement scandal The cast of characters, villains and heroes, in the Mississippi Department of Human Resources (MDHS) case seems to grow by the hour. following organizations: Whoops! She said its unfair that State Auditor Shad White, who initially investigated the scheme, and current Mississippi Department of Human Services Director Bob Anderson are free to make comments about Davis leadership while Davis is bound by a gag order and unable to respond. Ricky Jones, who has served as president of 100 Black Men of Jackson since March, said his organization just learned about the investigation last week when DHS notified them they would not be receiving a welfare grant this year. All six people charged are Mississippi residents, including the former W.W.E. Purported text messages obtained by Mississippi Today show that Favre and Prevacus founder Jake Vanlandingham offered the governor and nonprofit director shares of Prevacus and offered to buy the head of MDHS a Ford F-150 Raptor truck in return for their help. You and Nancy stuck your neck out for me with jake and Prevacus I know and thats going to turn out very good I believe.. JACKSON, Miss. Mr. Michel took orders, and millions of dollars, from a Malaysian financier who sought to gain political influence in the U.S., prosecutors said. Gov. Blanton explained that the U.S. Department of Health and Human Services Office of Inspector General had told the state agency not to interfere with its investigation and that the auditors office was already aware of the federal investigators involvement. Any amount helps us keep producing quality journalism for Mississippi. Auditor Shad White said his office is still attempting to determine the total amount of money involved, but the "sprawling conspiracy" already exceeds any embezzlement scheme in recent years. That ultimately led to (Wednesday's) arrests," DHS officials said in a statement. The total amount of money lost to the schemes has not yet been determined but the loss already exceeds any embezzlement scheme in the records of the auditors office, White said. The funds that were illegally obtained in this case were intended to help the poorest among us, Mr. White said in a statement Wednesday. Look for the "Republish This Story" button underneath each story. JACKSON, Miss. Sign up for our daily newsletter to get the latest updates on the Mississippi welfare scandal. On Tuesday, Hinds County Circuit Court Judge Adrienne Wooten spoke strongly in defense of a gag order in the case of former welfare director John Davis, saying that media coverage of the scandal threatens the courts ability to assemble an impartial jury. We could not cease funding until we had that letter from the state auditor (in January 2020). Much more remains to be revealed, including questions such as: As a nonprofit, your support is what powers our work. One of the nonprofits, Mississippi Community Education Center, shuttered after law enforcement arrested its owner Nancy New, while officials at the other nonprofit, Family Resource Center of North Mississippi, have not faced criminal charges. The former director of the Mississippi Department of Human Services and several others have been arrested in what the state auditor said is the largest public embezzlement case in state history.Special agents from the office of State Auditor Shad White have arrested John Davis, who retired after 28 years with DHS on July 31, 2019. The defendants used a variety of business entities and schemes to defraud the taxpayers, investigators said. Also, we have had a number of complaints concerning his services. MDHS discusses largest embezzlement scheme in state history, upcoming policy changes, Mother arrested for leaving children home alone to go to gym, police say, Suspect accused of kidnapping, raping child in South Memphis pleads not guilty, Whitehaven mourns loss of high school band director, City of Memphis takes formal stance on 5-year residency requirement for mayoral candidates. If youre not able to add the byline, please include a line at the top of the story that reads: This story was originally published by Mississippi Today and include our website, You cannot republish our editorial cartoons, photographs, illustrations or graphics without specific permission (contact our managing editor. Mississippi Auditor Shad White attends Cindy Hyde-Smith's watch party at the Westin Jackson Wednesday, November 27, 2018. The Auditors office has made it clear that the investigation is ongoing and more arrests are still possible. John Davis, who last year retired from the Department of Human Services, used some of the funds to pay for Brett DiBiase, a former professional wrestler, to go to drug rehab, the state auditor said. Editorial cartoons and photo essays are not included under the Creative Commons license and therefore do not have the "Republish This Story" button option. With your help, we've gotten a lot done but we're not finished yet! It's unclear when they will be unsealed. In 2020, officials said the loss exceeds any embezzlement scheme in the records of the Auditors office., You stuck your neck out for me: Brett Favre used fame and favors to pull welfare dollars (Mississippi Today), Phil Bryant had his sights on a payout as welfare funds flowed to Brett Favre (Mississippi Today), 8 revelations from Part 1 of The Backchannel investigation (Mississippi Today), This is a BETA experience. Emails obtained by Mississippi Today provide greater insight into the scope and type of foolery occurring within the federal grants. As a nonprofit, your support is what powers our work. Webb attached a letter in her email to Davis, showing her organization had terminated their contract with WWISCAA. This spring, Le Creuset has introduced an exciting new shade thats already selling fast: shallot, a soft lavender with pink and slight gray undertones. Toy Truck Drive. Special agents from the office of State Auditor Shad White have arrested John Davis, who retired after 28 years with DHS on July 31, 2019. Any web site our stories appear on must include a contact for your organization. 2023, Hearst Television Inc. on behalf of WAPT-TV. John Davis has been indicted in the largest embezzlement and fraud scheme in state history. Johnson says Davis then asked everyone to put away their cellphones and called him into the hallway. Therefore, while doing our due diligence, Paul LaCoste was asked not to use Families First for Mississippis brand and his funding was suspended. ( WJTV) - A former employee for the Mississippi Department of Human Services (MDHS) was arrested for embezzlement after an investigation by the Investigations Division of . Nancy New and her son, Zach New, stand accused of using the News nonprofit, MCEC, to pay for DiBiases drug treatment using TANF funds, White said. But fast forward to that afternoon session and my cell phone began to vibrate. Davis was appointed executive director of the Mississippi Department of Human Resources by then-Governor Phil Bryant in January, 2016. "MDHS self-reported the information that initiated this investigation to former Gov. The auditor's office said that the illicit money flowed through the Mississippi Community Education Center, a non-profit run by Nancy New and her son Zach New. The audit released less than a year later said that according to its budget, Victory Sports used the nearly $1.4 million welfare subgrant to pay for staff and coaches, a program design fee, equipment, an onsite nurse, marketing and other administration costs, and to purchase a $20,000 trailer and a $70,000 vehicle. The Auditors office has made it clear that the investigation is ongoing and more arrests are still possible. Create a recurring donation today to join our mission. White launched the initial investigation into how Davis administered welfare. John Davis, then executive director of the Mississippi Department of Human Services, at a hearing in Jackson, Miss., in 2016. retired in 2019 from the Department of Human Services. If you share our stories on social media, please tag us in your posts using. Since then, the subgrantee process has changed and the state plan for TANF reflects those changes. He had the latitude to unilaterally disperse funds as he felt necessary or wanted to, Blanton confirmed. She explained that she quit due to fear of losing her license and the requirements of the supervisor. Photo gallery: Equestrian program at Mississippi College, Nurse recounts horrors inside a Yazoo City nursing home, Coverage of Mississippis sprawling welfare scandal, Creative Commons Attribution-NoDerivatives 4.0 International License, Proudly powered by Newspack by Automattic. White has called for a full forensic audit of MDHS. Republish our articles for free, online or in print, under a Creative Commons license. Davis is indicted along with Nancy New, her son Zach New, Anne McGrew, Latimer Smith and Brett DiBiase. In a statement, the Department of Human Services said it had self-reported the information that initiated this investigation to the governors office in June 2019. The scheme came [] Five plead not guilty in MDHS embezzlement scheme - Vicksburg Daily News Earlier news reports indicated that the initial inquiry into the MDHS scandal may have been kicked off by Governor Bryant himself. Others doing this kind of thing are on notice: this will not be tolerated now, White said in a statement. Editorial cartoons and photo essays are not included under the Creative Commons license and therefore do not have the "Republish This Story" button option. The welfare agencys documentation, or lack thereof, shows Mississippi Community Education Center and Family Resource Center of North Mississippi did not, as New stated, evaluate the services and outcomes of its grantees. Feds: State auditor kept them in the dark on Mississippi welfare embezzlement bust. The audit, on the other hand, said that when the auditors office pressed DHS agency officials about the fraud tip, some members of executive management still did not inform auditors of the fraud, or expressed to auditors that the fraud tip was minor and involved an incident of an employee using a business care for personal use, and of an employee sleeping on the job.. That report ultimately led to todays arrests, it said. following organizations: Whoops! 1998 - 2023 Nexstar Media Inc. | All Rights Reserved. a proud member of the It ends today.. Johnson said, "Mr. Davis approached me and asked me did I not, did I not want to be there. I dont care how politically connected a person may be. But when the State Auditors Office later asked state agency officials at two separate meetings in 2020 if they knew of any other potential fraud, they did not relay the report, the audit released Tuesday said. White was appointed State Auditor by then-Governor Phil Bryant in 2018, when State Auditor Stacy Pickering resigned. A phone number for Ms. McGrew was busy. I just wanted you to be aware of this information in case this comes up.. Mr. DiBiase never gave those classes, auditors said, because he was being treated for an opioid addiction at the Rise in Malibu rehab center in California. "We are aware of these types of incidents. According to the auditor's office, the classes never took place. The director, John Davis, who retired in 2019 from the Department of Human Services, was one of six people charged in what the state auditor, Shad White, said was the largest embezzlement scheme that the office had seen in at least 20 years. Brett DiBiase pleads guilty in human services embezzlement scheme Keisha Rowe Mississippi Clarion Ledger 0:00 2:16 Brett DiBiase, a former deputy administrator for the Mississippi Department. Bryant denied introducing Favre or Vanlandingham to the nonprofit director, Nancy New. A little less than four months ago October 2019 it was reported that Nancy Drew and her son Zach had donated $5,000 to the Reeves campaign on behalf of their privately owned New Summit School in Jackson. By clicking submit, you agree to share your email address with Mississippi Today. All of this is being put in place to make sure the sins of the past never recur in the future, added Blanton. Please reload the page and try again. In doing so, we have identified concerns with Victory Sports expense reports and services. HINDS COUNTY, Miss. I'm the Executive Director. A major part of Reevess education agenda has been to funnel state tax money to New Summit and other private schools in the state, including another one owned by New and son. You cant edit our stories, except to reflect relative changes in time, location and editorial style. Prevacus, a pharmaceutical company that was working on a concussion treatment and which Favre was a top investor in, also allegedly received $2.15 million in allegedly stolen funds from the scheme, according to Mississippi Today. and I told him I was fine with it, you know that I was okay. It was not immediately clear Wednesday night if Mr. Davis or the other five charged had lawyers, and no one answered the phone at the homes of Mr. Davis, Ms. New, Mr. New and Mr. Smith. Blanton also said that since the department was still under contract with the nonprofits in the last months of 2019, the beginning of fiscal year 2020, it could not simply cut off their funding while auditors were investigating allegations. Here is what we know about them: John Davis was appointed director of DHS by former Gov. Tate Reeves appointed Anderson, former director of the Medicaid Fraud Control Unit in the Attorney Generals office, to clean up the agency in the aftermath. Everything was going well. Start a recurring donation of any amount to further this work and help hold public officials and those in power accountable. Shortly after last year's arrests in the largest reported public embezzlement scheme in state history, a whistleblower disclosed several previously unreported fraud allegations to the welfare department regarding one of its federal grant recipients. Before joining the staff at Mississippi Today in September of 2018, Anna worked for three years at Clarion Ledger, Mississippis statewide daily newspaper. Anyone can read what you share. Hearst Television participates in various affiliate marketing programs, which means we may get paid commissions on editorially chosen products purchased through our links to retailer sites. Brett DiBiase was a former professional wrestler with World Wrestling Entertainment,who later worked at DHS as the deputy director of transformational change, according to his LinkedIn page. Matter of fact I had gotten a promotion to another department, Johnson said. Here's an attempt to connect the players and what little is known thus far of the plot in this shameful drama: No one has been charged in connection with these purchases. Sign up for our daily newsletter to get the latest updates on the Mississippi welfare scandal. According to the auditor's office, Davis and another DHS employee made fake invoices to pay Brett DiBiase a former pro wrestler who later became a DHS employee with money intended to helppoor families. Davis and Smith are accused of fraudulently manufacturing documents to benefit DiBiase using TANF money, White said. DHS went on camera with WLBT to answer questions about what happened and what theyve changed to prevent the problem from happening again. A relative newcomer to Mississippi politics, Shadrach Shad Tucker White is 34 years old and was born in Sandersville in Jones County, MS. Theyve also started bringing in subgrantees for training on whats expected and how they can best meet federal guidelines. New described issues with their partner, Victory Sports Foundation owned by former football player Paul Lacoste, who was paid to conduct a boot camp-style fitness program, often attended by professionals and lawmakers. With your help, we've gotten a lot done but we're not finished yet! We will continue to follow this case and update you as new developments are made available. According to MDHS, investigators said Lashanda Feazell, while Director of Procurement at MDHS, used the agencys credit card to pay her personal cellular phone bills in the amount of $5,741.39 during the period of August 2018 through January 2021. "He asked me, he said do you know who I am? We hear from a former employee who is just one of many who were fired by Davis. Mississippi Community Education Center has also failed to turn over documents the agency needs to complete its forensic audit or conduct a full grant closeout the departments process for ensuring the nonprofit complied with grant requirements and spent the funds properly. Click to email a link to a friend (Opens in new window), Click to share on Twitter (Opens in new window), Click to share on Facebook (Opens in new window), https://i0.wp.com/nemiss.news/wp-content/uploads/2020/02/DHS-arrests.jpg?fit=1200%2C600&ssl=1, https://nemiss.news/wp-content/uploads/2023/02/nemiss-full-logo-300x77.jpg, Connecting the dots: the MDHS embezzlement scandal, Officers investigate shots fired report near Blue Springs, Retiring fire chief Steve Coker reflects on years of service, Mississippi Community Education Center (MCEC). Anna has received national recognition for her work, including the 2021 Goldsmith Prize for Investigative Reporting, the 2021 Collier Prize for State Government Accountability, the 2021 John Jay/Harry Frank Guggenheim Excellence in Criminal Justice Reporting Award, the 2020 Al Neuharth Innovation in Investigative Journalism Award and the February 2020 Sidney Award for reporting on Mississippis debtors prisons. Seven New England fishermen charged with tax evasion and failing to file returns "Chapitos" charged in department's latest actions to disrupt flow of illegal fentanyl and other dangerous drugs Others doing this kind of thing are on notice: This will not be tolerated now., Former Mississippi Welfare Director Charged With Embezzling Millions, https://www.nytimes.com/2020/02/05/us/john-davis-mdhs-brett-dibiase.html. She also received first place in the regional Green Eyeshade Awards in 2021 for Public Service in Online Journalism and 2020 for Business Reporting, and the local Bill Minor Prize for Investigative Journalism in 2019 and 2018 for reporting on unfair medical billing practices and hunger in the Mississippi Delta. We want to make our employees comfortable and proud to be a part of DHS.. Republish our articles for free, online or in print, under a Creative Commons license. We are verifying those as well to determine the validity of such. The documentation submitted by the News claimed this was to pay DiBiase for conducting training classes that never, in fact, took place, investigators said. They said Mr. Davis, along with Ms. New and Mr. New, used some of the embezzled funds to invest in medical device companies. April 14 (UPI) -- A former worker at the Art Institute in Chicago has pleaded guilty to carrying out a $2 million embezzlement scheme. He attended a professional development conference led by Davis outside the department and he says the encounter left him confused and embarrassed. Persons arrested by the Mississippi Office of the State Auditor are presumed innocent until proven guilty in a court of law. Our stories may appear on pages with ads, but not ads specifically sold against our stories. Phil Bryant in January 2016. Read more. Hurst said, neither the FBI nor the United States Attorneys Office was contacted by the State Auditor or the Hinds County District Attorney about this investigation, although millions of federal dollars are alleged to have been stolen.. Mississippi Today retrieved a 2017 email from Family Resource Center director Christi Webb, in which she described to Davis allegations of blatant deception at one of their partners, the local community action agency in Greenville, Warren-Washington-Issaqueena-Sharkey Community Action Agency or WWISCAA. Nancy New and her son are also accused of transferring millions in TANF funds to their private businesses, White said. All TANF funds will go through the RFP process, Blanton said. MDHS released a statement about the arrests. Phil Bryant and other officials in his home state in order to influence roughly $8 million in welfare payments for himself, pharmaceutical company Prevacus, and a volleyball court for the University of Southern Mississippi, according to an expose published last week Mississippi Todaythough Favre has not been charged criminally or accused of a crime.

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