U.S.

Former Mississippi human services official pleads guilty to state and federal charges in massive welfare fraud scheme, prosecutors say



CNN

The former head of the Mississippi Department of Human Services has pleaded guilty to both state and federal conspiracy and thefts in what officials call the largest embezzlement in state history, according to the Department of Justice and the Hinds County District Attorney.

John Davis, 54, was the department director at the time state auditors say more than $70 million in federal welfare funds were misused, including it spent on officials’ personal expenses and funneled into projects related to prominent Mississippians, including former NFL quarterback Brett Favre.

The US Department of Justice said Thursday that Davis and “his co-conspirators” have used federal funds “for their personal use and benefit.”

“At Davis’s direction, MDHS provided federal funds to two nonprofits and then instructed the two nonprofits to fraudulently award contracts to various entities and individuals for social services that were never delivered,” the DOJ said in a statement. press release.

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On Thursday, the former state official pleaded guilty to two federal charges: one count of conspiracy to commit wire fraud and theft related to programs that received federal funds and one count of theft related to programs that received federal funds, the DOJ announced. He could be sentenced to five years in prison for conspiracy and to 10 years for theft.

Davis also pleaded guilty to five counts of conspiracy and 13 counts of fraud in Hinds County, district attorney Jody E. Owens said in a tweet Thursday.

“Davis was one of six defendants arrested and charged later in 2020 in one of the largest embezzlement schemes in Mississippi history,” Owens said.

The massive fraud scheme was uncovered in 2020 by a state audit of federal funds allocated to government agencies. When state auditor Shad White announced the finding, he called the scheme “the most egregious mistake my staff has seen in their careers.”

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The state auditor has said about $77 million in money earmarked for a state welfare program, Temporary Assistance for Needy Families, was misused.

More than $4 million was used to build a Brett Favre-backed volleyball center at the University of Southern Mississippi, Favre’s alma mater and where his daughter played the sport at the time, according to researchers.

The state of Mississippi filed a civil suit earlier this year against more than 35 people and entities, including the former NFL quarterback.

Text messages were released last week as part of that civil suit by attorneys for the nonprofit organization founded by Nancy New, which has already pleaded guilty to welfare fund charges. They showed that Favre discussed how he got money through New’s nonprofit and expressed his love for Davis after being told about the funding, as well as meetings with Davis and former Mississippi Gov. Phil Bryant on the financing.

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Bryant and Favre are not currently under criminal charges of any wrongdoing and Bryant is also not named as a defendant in the civil suit.

The former quarterback’s attorney told CNN Favre was unaware that welfare funds were being used for the volleyball center.

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