Mississippi's former welfare director, four colleagues and a former pro wrestler have been charged with carrying out a multimillion-dollar embezzlement scheme to siphon public money from needy. Former director of MDHS and others arrested in largest public She also worked as an investigative reporter for the Center for Public Integrity and Jackson Free Press, the capital citys alternative newsweekly. What is the extent of the relationship between Tate Reeves and the News, mother and son? A $50,000 surety bond covers Jackson's employment as the Farmington City Clerk. Special agents from the office of State Auditor Shad White have arrested John Davis, the former director of the Mississippi Department of Human Services, and five others in a multimillion-dollar embezzlement scheme. Uncovering the scheme goes back further than you may realize. Republish our articles for free, online or in print, under a Creative Commons license. It's unclear when they will be unsealed. The News also directed millions in public money to their private businesses, used the money personally, and concealed the transactions, according to the auditors. MDHS sits down to discuss the embezzlement case for the first time since the news broke a week ago. When it comes to finding the misspending detailed in the indictments, this was the atmosphere at the agency at the time. Heres an attempt to connect the players and what little is known thus far of the plot in this shameful drama: Mississippi state auditors officials were to meet Monday with FBI agents to brief the Feds on the unfolding Mississippi Department of Human Services (MDHS) embezzlement scandal. "MDHS would like to thank the Office of the State Auditor investigators for their diligent work in seeing this investigation through," the post said. 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. 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. By the time these meetings occurred in April, July and August of 2020 former welfare department director John Davis, who was indicted last year for his critical role in the alleged scheme, had been retired for about a year. Auditor:State agencies must improve when it comes to cybersecurity. New sent a similar email to former Department of Human Services Director Christopher Freeze, who took over for Davis a few months after Davis retired in 2019. Persons arrested by the Mississippi Office of the State Auditor are presumed innocent until proven guilty in a court of law. Much more remains to be revealed, including questions such as: If that doesnt happen, that money will go to a deserving charity.. State auditors did not say what precipitated the investigation and did not give a specific dollar amount for the money that they say was embezzled, only that it was in the millions. The former head of the Mississippi Department of Human Services has been arrested as part of a multi-million dollar embezzlement scheme that among other things paid for a former . 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. And they did start an internal audit at the beginning of 2019. 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. And they did start an internal audit at the beginning of 2019. Please reload the page and try again. When White released the first audit outlining the scheme in May of 2020, he said Davis saw his appointment as head of human services in 2016 as an opportunity to build a kingdom over there. But in the last year, Whites office has declined on several occasions to publicly discuss the particulars of the criminal case. This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License. Copyright 2023 Nexstar Media Inc. All rights reserved. As a reminder, the scheme includes more than $4.15 million dollars in embezzled government money. Paul Lacoste did not return calls Tuesday morning. The first announcement of the arrests was apparently made on the website of the (Brookhaven, MS) Daily Leader at 4:51 p.m. Wednesday, Feb. 5. John Davis was indicted along with several others in the largest embezzlement and fraud scheme in Mississippi history. Davis and Smith created documents and arranged payment knowing DiBiase was not performing the work he was hired to perform, White said. That report ultimately led to todays arrests, it said. A judge in the ongoing welfare embezzlement case is balancing the publics interest in learning how officials misspent tens of millions of federal dollars with a defendants right to a fair trial. 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.. DiBiase was allegedly paid to teach classes about drug use and instead used the money to pay for his own drug rehabilitation in Malibu, California. Johnson says he never received anything other than glowing employee reviews. Transparency: Is Mississippi spending too much or not enough money on childrens programs? Mississippi's Ex-Welfare Director, 5 Others Arrested Over - NPR An accountant involved in a a major embezzlement scheme has pleaded guilty to her role in a staggering theft of welfare money in Mississippi, the poorest state in the U.S. Hinds County Circuit. We prefer Author Name, Mississippi Today in the byline. Create a recurring donation today to join our mission. 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. a proud member of the 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. Nancy New and her son are also accused of transferring millions in TANF funds to their private businesses, White said. Founded in 2016 as the states first nonprofit, nonpartisan newsroom, Mississippi Todays roots in Capitol coverage have grown to encompass a myriad of beats beyond politics and policy, including education, public health, justice, environment, equity, and, yes, sports. He resigned in July 2019, at about the same time the auditor's office began its investigation. The Hinds County District Attorney secured an indictment on December 14, 2021. The purported messages also show a request from Favre asking members of the group to help to pay a $1 million debt Favre owed to the University of Southern Mississippi for the volleyball court he promised the school. The state auditors office said it would not be making any additional comments. All six people charged are Mississippi residents, including the former W.W.E. Former Art Institute worker pleads guilty to $2M embezzlement scheme - MSN DHS spokesperson Danny Blanton rejected the auditors narrative that the department concealed fraud reports from the auditors office. The agency expects to soon file civil charges against Davis and others who received the funds. DHS went on camera with WLBT to answer questions about what happened and what theyve changed to prevent the problem from happening again. Johnson said, "she said well I did speak with Mr. Davis and he asked for you to be terminated. In July 2019, he announced he would resign by the end of the month. The funds that were illegally obtained in this case were intended to help the poorest among us, Mr. White said in a statement Wednesday. By clicking submit, you agree to share your email address with Mississippi Today. They were among 15 current and former Boston police officers charged in the alleged overtime scheme involving the evidence control unit. 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. Editorial cartoons and photo essays are not included under the Creative Commons license and therefore do not have the "Republish This Story" button option. 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. Mississippi welfare embezzlement scandal: What we know so far. We did reach out to Davis attorney Merrida Coxwell for comment. Everything was going well. As we reported, the Mississippi Community Education Center or MCEC was a sub grantee receiving TANF dollars that first flowed through DHS. Nonprofits made most of these purchases, which obscured the spending from public view. The Temporary Assistance for Needy Families funds are part of a lawsuit filed against 38 people or companies that seeks to recover millions in federal funds. John Davis, former director of the Mississippi Department of Human Services, was arrested within the largest alleged public embezzlement case in state history. Toy Truck Drive. White has called for a full forensic audit of MDHS. She explained that they were absolutely doing nothing in either center.. Executive Director John Davis was two-and-half-years into his time as head of the agency when they decided to add an Office of Inspector General within DHS. 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. 0:00. Former MDHS Director John Davis pleads guilty to defraud conspiracy Follow him on Twitter @gbolognaCL. (WLBT) IBM Will Stop Hiring Humans For Jobs AI Can Do, Report Says, Yellen Urges Congress To Raise Debt Limit Immediately, Warning U.S. Could Run Out Of Money By June, Illinois Dust Storm Leaves Multiple People Dead Amid Highway Pile-Up, Hunter Biden Paternity Case: Arkansas Judge Orders Presidents Son To Answer Questions About Finances, FDIC Suggests Scrapping $250,000 Bank Account Insurance LimitBut Just For Businesses, Disney-DeSantis Feud Escalates: Board Overseeing Disney World District Countersues Company, Gas Prices Drop For Seven Straight Days: Heres Where Its CheapestAnd Where Its Still Rising, Trans Montana Lawmaker Zooey Zephyr Sues State For Banning Her From House Floor, First Republic Bank Failure: A Timeline Of What Led To The Second-Largest Bank Collapse In U.S. History, Senate Takes First Step On Debt CeilingAs Feinsteins Absence Could Help GOP Push Bill Loathed By Democrats, Citizens, PNC, UMB Stock Plummet After First Republics Epic FailureHere Are The Bank Stocks That Are Plunging, Texas Mass Shooting: What We Know About The At-Large Suspect And The Search To Find Him, Donald Trump Seeks Mistrial In E. Jean Carroll Rape Trial, JPMorgan Stock Set For Second-Best Day This Year After First Republic Takeover, First Republic Taken Over By JP Morgan After Regulators Shut It Down, Texas Mass Shooting: Police Have Zero Leads On Suspect Accused Of Killing 5 In Execution-Style Shooting, Weekend Box Office: Super Mario Bros. Will Hit $1 Billion In Sales On Sunday, Studio Says, White House Correspondents Dinner: Biden And Roy Wood Jr. Take Shots At Fox News And GreeneAnd Bidens Age, This Stock Market Indicator Is The Weakest Its Ever BeenAnd Other Warning Signs Are Flaring, Montana Restricts Gender-Affirming CareHere Are All The States With Similar Bans Or Restrictions, You stuck your neck out for me: Brett Favre used fame and favors to pull welfare dollars, Phil Bryant had his sights on a payout as welfare funds flowed to Brett Favre, 8 revelations from Part 1 of The Backchannel investigation. 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. At Davis direction, MCEC used TANF money received from DHS to pay for DiBiases opioid treatment at the Rise in Malibu facility, White said. MDHS Embezzlement Part 1: Charges and evidence That ultimately led to (Wednesday's) arrests," DHS officials said in a statement. 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. You do not have the right to treat taxpayer money as your own or to lie to the taxpayers about what youre doing with that money. Earlier news reports indicated that the initial inquiry into the MDHS scandal may have been kicked off by Governor Bryant himself. JACKSON, Miss. Theyve also started bringing in subgrantees for training on whats expected and how they can best meet federal guidelines. Johnson says Davis then asked everyone to put away their cellphones and called him into the hallway. John Davis has been indicted in the largest embezzlement and fraud scheme in state history. "MDHS self-reported the information that initiated this investigation to former Gov. "MDHS self-reported the information that initiated this investigation to former Gov. a proud member of the The indictment alleges his agency entered a $48,000 contract with ex-wrestler Brett DiBiase to conduct opioid addiction education courses, and paid him knowing he wasnt conducting the work because he was in rehab. 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. Any web site our stories appear on must include a contact for your organization. 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. Zach New, Nancy's son, is the assistant executive director of the Mississippi Community Education Center and is also accused ofusing TANF funds for personal use as well as for investing in private medical device companies. John Davis worked atDHS for nearly three decades, eventually rising to director in 2016.