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A6 U.S. NEWS
Friday 7 February 2020
Auditor: More than $4M stolen from Mississippi welfare funds

By JEFF AMY and EMILY literacy promotion, addic-
WAGSTER PETTUS tion education and obe-
Associated Press sity education. Then-Gov.
JACKSON, Miss. (AP) — Mis- Phil Bryant appeared at
sissippi's state auditor said the ribbon-cutting of the
Thursday that investigators Jackson office in 2016 with
believe at least $4 million Davis and New. In his last
in federal welfare money State of the State address
was stolen by the former in 2019, Republican Bryant
head of the state welfare called the group "a model
agency and others in the of success for thousands of
nation's poorest state. Mississippians and one that
At least $48,000 of that paid is being emulated all across
for a luxury drug rehabilita- America."
tion program for a former Reeves said he has re-
pro wrestler, according to ceived campaign contri-
indictments issued Wednes- butions from some of those
day, which also alleged a indicted in this case, and
politically connected non- he acknowledged that
profit administrator and her one of his 2019 campaign
son took more than $4 mil- commercials was filmed
lion __ including more than inside a school Nancy New
$2 million invested in two owns. Reeves didn't have
Florida medical compa- a total for the contributions
nies. Republican Gov. Tate Reeves speaks with reporters on a variety of issues, including the state pris- Thursday but said his cam-
Republican Auditor Shad on system and the state auditor's office investigation of the former director of Mississippi's welfare paign will put the money
agency and four other people, accused of embezzling millions in federal money meant for the
White said his office is still poor, Thursday, Feb. 6, 2020, in Jackson, Miss. into a separate account.
seeking to determine the Associated Press Reeves said if the donors
scope of the suspected are convicted, he will give
public embezzlement, ex- Those indicted and arrest- nity Education Center and on the assistance program the campaign contribu-
panding its audit of the ed are the department's New Learning Resources; in 2017, with only $9 million tions to the state to cover
Department of Human Ser- former director, John Davis; her son Zach New, who is going to cash assistance. some of the cost of lost wel-
vices to a wider time frame. the ex-wrestler, Brett DiBi- assistant executive director DiBiase, 36, is the son of for- fare money. Otherwise, he
"This is a sprawling conspir- ase; former Department of of the education center; mer pro wrestler Ted DiBi- said his campaign will give
acy," White said. "We're go- Human Services employee and Anne McGrew, an ac- ase, who was known as the the money to a charity.
ing to continue to look to Latimer Smith; Nancy New, countant for the education "Million Dollar Man." Indict- Nancy New and Zach New
find additional monies that who is owner and director center. ments allege Davis con- are alleged to have trans-
have been lost or stolen." of the Mississippi Commu- It's unclear if any of them spired with Nancy New to ferred $2.15 million from
have lawyers representing send $48,000 in block grant the center's accounts to
them. All were released money to pay for Brett DiBi- make investments in medi-
from jail Wednesday with- ase's drug rehabilitation in cal companies Prevacus
out having to post bail. Malibu, California, in early and PresolMD during 2019.
Mississippi Gov. Tate Reeves 2019. Payments were made Indictments allege they
praised the auditor Thurs- to a company owned by transferred more than $2
day, saying the investiga- Brett DiBiase supposedly for million from the center's
tion has uncovered "what his teaching classes about bank accounts to ac-
appears to be a truly dis- drug abuse, with Davis and counts of a for-profit com-
gusting abuse of power." Smith falsifying invoices pany they control.
"It makes me sick to think and other records, prose- Davis stepped down in July
that resources for people cutors say. and Bryant replaced him
in poverty were being The News are associated on an interim basis with
embezzled by a powerful with a series of nonprof- Christopher Freeze, former
government official," said its and schools. Mississippi leader of the FBI in Missis-
Reeves, who became gov- Community Education sippi.
ernor in January after eight Center, operating as Fami- In most recent large pub-
years as lieutenant gover- lies First for Mississippi, re- lic corruption cases in Mis-
nor. ceived more than $44 mil- sissippi, criminal charges
Federal welfare money lion in government grants have come in federal
was once spent mostly on from mid-2014 to mid-2018, court, but these charges
cash assistance to poor according to nonprofit tax came in state court.
families, but after changes filings. Amounts spiked to U.S. Attorney Mike Hurst
in the 1990s the Temporary $12.9 million and $26.7 mil- said although federal mon-
Assistance to Needy Fami- lion in the last two years, as ey was allegedly stolen, his
lies money is given to states Davis outsourced a large office had been kept in the
in block grants, and states portion of Mississippi's Tem- dark until Hinds County Dis-
can use the money on oth- porary Assistance to Needy trict Attorney Jody Owens
er activities meant to help Families spending to the met with him just before in-
people. The liberal-leaning group. dictments were issued.
Center for Budget and Poli- The money was intended Owens and White said state
cy Priorities found Mississippi to provide youth develop- court indictments were a
spent about $120 million in ment, parenting educa- faster path to stopping on-
state and federal money tion, workforce readiness, going embezzlement.q