The Mississippi Office of the State Auditor released the following press release in regard to the case:
Auditor Arrests Former Director of DHS and Co-Conspirators in Largest Public Embezzlement Case in State History
February 5, 2020
Defendants Accused of Obtaining Millions in Funds Intended for Poor
JACKSON, Miss. – Special agents from the office of State Auditor Shad White have arrested John Davis, the former Director of the Mississippi Department of Human Services (DHS); former DHS employee Latimer Smith; Dr. Nancy New, owner and Director of the Mississippi Community Education Center (MCEC) and New Learning, Inc.; Zach New, Assistant Executive Director of MCEC; Anne McGrew, accountant for MCEC; and Brett DiBiase in connection with a multimillion-dollar embezzlement scheme. The indictments include a range of violations involving fraud and embezzlement.
Auditors concluded, after an eight-month investigation, that the accused conspired to illegally obtain millions in public funds from the Temporary Assistance for Needy Families (TANF) program administered by DHS. Defendants used a variety of business entities and schemes to defraud the taxpayers.
“The funds that were illegally obtained in this case were intended to help the poorest among us. The funds were instead taken by a group of influential people for their own benefit, and the scheme is massive. It ends today,” said Auditor White.
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.
“I don’t care how politically connected a person may be. You do not have the right to treat taxpayer money as your own or to lie to the taxpayers about what you’re doing with that money. Others doing this kind of thing are on notice: this will not be tolerated now,” said White.
All accused were indicted by a grand jury assembled by Jody Owens, District Attorney of Hinds County. District Attorney Owens and assistant district attorneys will prosecute the case.
“The Hinds County District Attorney’s Office looks forward to working with the State Auditor Shad White and his dedicated team to end public corruption in Mississippi,” said Owens. “The misuse of government funds designed for families in need will not be tolerated by our office and those who break the law will be prosecuted to the fullest extent possible.”
“We have worked tirelessly in the Auditor’s office to uncover this sprawling conspiracy, so I want to thank the investigators, auditors, and analysts who all assisted,” added White.
The total amount of money lost to these schemes has not yet been determined, but the loss already exceeds any embezzlement scheme in the records of the Auditor’s office. Records are kept for all cases from the last twenty years.
Because of the large amount of money involved, and until the full extent of the loss to the taxpayers is determined, this is considered an ongoing investigation by the Auditor’s office. There will be no additional comments at this time.
If convicted on all counts, the accused face hundreds of years in prison. Persons arrested by the Mississippi Office of the State Auditor are presumed innocent until proven guilty in a court of law.
The New York Times Ran the Story and here's the link.
https://www.nytimes.com/2020/02/05/us/john-davis-mdhs-brett-dibiase.html
Brett DiBiase, the son of WWE Hall of Famer Ted DiBiase, Brett DiBiase. According to the article in the New York Times, the former director of the state welfare agency and five others are being charged in one of the biggest embezzlement scandals in the history of the office. Allegedly, DiBiase was given funds to go to a drug treatment facility in Malibu that was earmarked for Mississippi's welfare programs. According to documents, DiBiase was allegedly given the money as payment for classes that he didn't teach for drug abuse.
