Former Mississippi Welfare Director Charged With Embezzling Millions

Rogelio V. Solis/Associated Press

The former director of Mississippi’s welfare agency was arrested on charges that he took part in a scheme to embezzle millions of dollars for personal use and to pay for a former professional wrestler to go to a luxury drug rehabilitation center, the state auditor announced on Wednesday.

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 in at least 20 years.

All six people charged are Mississippi residents, including the former W.W.E. wrestler Brett DiBiase, 31, who state auditors said was paid with welfare funds for teaching classes about drug use. 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.

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.

“The funds that were illegally obtained in this case were intended to help the poorest among us,” Mr. White said in a statement Wednesday. “The funds were instead taken by a group of influential people for their own benefit, and the scheme is massive. It ends today.”

State auditors said Mr. Davis, of Brookhaven, Miss., conspired with the administrators at a nonprofit, the Mississippi Community Education Center, and the organization’s accountant to defraud taxpayers and create phony invoices.

The organization’s executive director, Nancy New, 67, and its assistant executive director, Zack New, 37, were arrested on Wednesday, along with the center’s accountant, Anne McGrew, 63, state auditors said.

A former Department of Human Services employee, Latimer Smith, 26, was also arrested, according to Mr. White.

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. There was also no answer at the main office of the Mississippi Community Education Center in Jackson.

Mr. DiBiase, who comes from a professional wrestling family, did not immediately respond to an email request for comment. A phone number for Ms. McGrew was busy.

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 state auditor’s office said it would not be making any additional comments.

A spokesman for the Department of Human Services did not immediately respond to a request for comment on Wednesday night.

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. They said Mr. Davis, along with Ms. New and Mr. New, used some of the embezzled funds to invest in medical device companies.

“I don’t care how politically connected a person may be,” Mr. White said. “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.”