Sep 23, 2024

Mississippi Welfare Scandal Continues to Unfold After Agency Director Pleads Guilty to Fraud Charges

by Nadia El-Yaouti | Sep 29, 2022
Mississippi state auditor and DA Photo Source: Chad White, the Mississippi state auditor, right, and Hinds County District Attorney Jody Owens discuss the auditor’s office investigation about millions in federal money meant for the poor, in February in Jackson, Miss. (Rogelio V. Solis/Associated Press)

The threads are continuing to unravel in one of the largest welfare embezzlement schemes in the state of Mississippi.

Last week, the U.S. Department of Justice along with the Hinds County District Attorney's Office announced that former state official John Davis pled guilty to federal counts and 18 state counts.

Davis was formerly the head of the Mississippi Department of Human Services and was accused of facilitating one of the largest welfare embezzlement schemes in the state. Officials accused Davis of taking money allocated for the state's welfare programs and instead using it to fund lavish projects. One such project has been linked to the Hall of Fame footballer, Brett Favre.

According to officials, Davis conspired with other individuals including non-profit organizations to siphon money out of programs designed for the most vulnerable in the community. Davis moved at least $94 million from the Temporary Assistance for Needy Families fund (TANF) into various non-profit groups. One such nonprofit was the Mississippi Community Education Center. While allocating the money to these nonprofit groups is not illegal in itself, the way the funds were spent once they were moved was.

The head of the Mississippi Community Education Center, Nancy New, conspired alongside Davis to help fund herself, her friends, Davis, and his family members. In a civil lawsuit filed by the state, at least 38 defendants misappropriated the funds after they passed through New’s non-profit.

Among these defendants was John Davis’ nephew, who was paid $400,000 to create coding programs for community members to utilize. The complaint details that Davis's nephew has no prior experience as a programmer and that no such coding programs were ever created. Davis’ brother-in-law was also paid $600,000 for a job that did not exist and for a lease on a building that did not exist.

These two defendants were just a fraction of the defendants who used the public money to support their lavish lifestyles. New’s son, Zachary New, served as the vice president of his mother’s non-profit and was also accused of misappropriating funds.

During the course of the investigation, both Nancy and Zachary New eventually pled guilty to state fraud charges. The mother and son duo also agreed to testify against Davis as part of a plea deal. Their testimony in part helped secure charges against Davis and his involvement in the scheme.

The civil lawsuit details that the embezzlement scheme started around 2017 when money allocated for TANF began to make its way into two bogus nonprofit groups, each of which was paid roughly $3 million. The lawsuit goes on to detail many other ways in which the funds were misappropriated in order to fund the lavish lifestyle of Davis, New, and those closest to them.

While the investigation into the embezzlement scheme has been brewing for quite some time, it wasn't until the involvement of Football Hall of Famer Brett Favre that the scheme made national headlines. Favre’s involvement also sheds light on just how brazen the scheme was and how widespread it became, especially amongst the state’s elite.

Earlier this month, text messages entered into the state's civil lawsuit detail how Governor Phil Bryant helped Favre secure funding for a volleyball facility that was built at his alma mater, the same university his daughter attended, the University of Southern Mississippi. The text messages show Bryant texting nonprofit founder Nancy New, “Just left Brett Favre.” He adds in the text, “Can we help him with his project? We should meet soon to see how I can make sure we keep your projects on course.”

The text exchange came weeks after Davis left his post with the state following his embezzlement charges. Favre seems aware of the timing of his request as the text exchange shows Favre asking Bryant how a new agency director would impact funding for the volleyball stadium he wanted to build. To this, Bryant replied, “I will handle that… long story but had to make a change. But I will call Nancy and see what it will take.”

As the investigation continues to unfold, neither Governor Bryant nor Favre have been charged with any criminal wrongdoing. Despite this, public scrutiny continues to grow as residents throughout Mississippi and the nation try to grapple with the massive misuse of funds in a scheme that is seemingly ripped right from the movies.

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Nadia El-Yaouti
Nadia El-Yaouti
Nadia El-Yaouti is a postgraduate from James Madison University, where she studied English and Education. Residing in Central Virginia with her husband and two young daughters, she balances her workaholic tendencies with a passion for travel, exploring the world with her family.