Shad White talks $94 million embezzlement scandal

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Yesterday, State Auditor Shad White announced that over $94 million in grants from the Mississippi Department of Human Services (DHS) did not, in fact, go to poor Mississippians. Rather, it was flowed through two nonprofit organizations and eventually used to buy cars, sponsor a college baseball tournament, hire family members of an elected official, and even pay former professional athletes for appearances they never made.

White joined The Gallo Show this morning to talk about what could be the largest embezzlement scandal ever recorded in the state of Mississippi.

“What we knew…prior to the audit that was released yesterday was that six individuals had committed criminal violations,” White said. “We arrested those individuals in February, and there had been some reporting around on how TANF money had been spent at DHS over the course of the last couple of years. What this audit did, I think, has confirmed a lot of that reporting but also adds some new detail into how our TANF money was being spent by DHS and more specifically by two sub-grantees…that DHS gave a bunch of money to. The conclusion of the audit is that 94 million dollars of that spending has been questioned by the auditor’s office, so what that means is we either see evidence that the money was misspent—meaning it was spent in violation of the law—or we’re unable to find adequate documentation to prove that it had been spent appropriately under the law.”

The two nonprofit sub-grantees that received millions of dollars are the Family Resource Center of North Mississippi (FRC) and the Mississippi Community Education Center (MCEC). Both MCEC and FRC often conducted business under the “Families First” name.

The six individuals that were indicted earlier this year in relation to welfare spending are John Davis, Nancy New, Zach New, Latimer Smith, Anne McGrew, and Brett DiBiase.

The full 104-page audit that includes the list of questioned spending can be found here. The list contains big names such as NFL Hall of Famer Brett Favre and WWE Hall of Famer Ted DiBiase.

“It’s one of the most egregious audits my staff has ever seen,” White said.

To listen to the full interview with White, check out the video below.

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