Former welfare agency director John Davis is expected to plead guilty on Thursday to two federal counts and 18 counts of fraud or conspiracy related to his role in the US welfare scandal. Mississippi, according to separate federal and state court filings.
The new federal charges relate to welfare funds Davis allegedly helped funnel the businesses of retired professional wrestler Ted “Teddy” DiBiase Jr., son of famed WWE wrestler Ted “The Million Dollar Man” DiBiase. Davis and Teddy DiBiase Jr. had developed a close relationship during Davis’ tenure as wellness director from 2016 to 2019, as Mississippi Today reported on its investigative series “The Backchannel.”
Davis asked two nonprofits receiving tens of millions in welfare funds from his department to pay Teddy DiBiase Jr. under what the federal court filing called “fictitious contracts” to offer personal development courses for state employees and a program for inner-city youth, “regardless of knowing if work had been done and knowing that no work would ever be done.
Davis, who had never faced federal charges for his role in the welfare scandal, is the latest defendant to plead guilty and agree to help prosecutors. In April, Nancy and Zach New pleaded guilty to state charges in the welfare case as well as separate federal fraud charges they faced over public school funding. The News is cooperating with federal investigators, who continue to investigate the welfare program and others who may be involved.
The unsealed federal information bill Wednesday, to which Davis is set to plead guilty, also describes four unnamed co-conspirators in the scheme. Based on dates of incorporation provided in the filing of organizations or companies affiliated with the co-conspirators, Mississippi Today identified three of the alleged co-conspirators as Nancy New, director of the Mississippi Community Education Center; Christi Webb, director of the Northern Mississippi Family Resource Center; and Teddy DiBiase Jr., owner of Priceless Ventures, LLC and Familiae Orientem, LLC.
An unnamed fourth co-conspirator, a Hinds County resident, is unidentifiable in the file.
Davis and the three alleged co-conspirators each face civil charges in an ongoing lawsuit the Mississippi Department of Social Services is filing in an attempt to recover welfare money from people who l received inappropriately.
“As a result of the actions of DAVIS, the co-conspirators and others, millions of dollars of federal safety net funds have been diverted from needy families and low-income people in Mississippi,” the filing says. federal.
The bill reports that Davis chose to forego a formal indictment and plead guilty to one count of conspiracy to commit wire fraud and one count of theft, which carry maximum prison terms of five and 10 years, respectively. The court record does not indicate what type of agreement he received for pleading guilty.
The federal charges specifically describe four payments or contracts the Family Resource Center made to Teddy DiBiase’s businesses in June and August 2018 totaling nearly $2.2 million.
Casey Lott, Webb’s attorney, who faces civil charges but has not been charged criminally, said his client stopped paying Teddy DiBiase Jr. when it became clear his companies weren’t providing not services.
“The DiBiases and their organizations are committed to providing services to families in need,” Lott said in a written statement late Wednesday. “The problem is that they haven’t kept their end of the bargain. And once they refused to do everything Christi asked them to do, she refused to give additional subgrants to these organizations. This enraged John Davis. He shouted and cursed Christi and other FRC employees for not sending them money anyway. He threatened to cut off their funding if Christi didn’t do what he told her to do. And when she stood firm and did the right thing, he followed through on his threat. Christi is the only one who said “no” to John Davis, and she was punished for it. She was forced to lay off hundreds of people. These innocent people who provided much needed services to the northern Mississippi community lost their jobs because Christi stood up to John Davis and did the right thing. So to say she is a “co-conspirator” is absurd. »
Attorneys for New, Davis and Teddy DiBiase declined to comment or could not be reached Wednesday.
Agents from the Auditor’s Office originally arrested Davis in February 2020 on charges of conspiracy, embezzlement and fraud after an investigation lasting approximately nine months. Hinds County prosecutors charged Davis with using federal funds administered by the agency he oversaw to send Ted DiBiase Sr.’s other son, Brett DiBiase, to a luxury drug rehab facility in Malibu. The criminal charges were only a small part of a scandal that forensic auditors ultimately determined was a total loss of at least $77 million in funds from a federal program called Temporary Assistance for Needy Families.
Brett DiBiase pleaded guilty to his role in the scandal – collecting $48,000 from the agency for work he didn’t complete while in treatment – in December 2020.
In April, Davis was again charged with 20 counts, including nine counts of bribery, which carried a 150-year sentence.
A dismissal order filed Wednesday in the state case signals that Davis plans to plead guilty to five counts of conspiracy and thirteen counts of fraud in state court Thursday after pleading guilty to federal charges. The filing says Davis will serve out his entire sentence in the case in federal court and avoid the notoriously harsh conditions of Mississippi state prisons, an arrangement similar to the plea deal New received in April. New, his son Zach New, Brett DiBiase and Mississippi Community Education Center accountant Ann McGrew pleaded guilty but were not sentenced.
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