Retired wrestler admits to scamming Mississippi welfare agency, will turn state’s evidence

Published 5:42 pm Thursday, December 17, 2020

During his televised wrestling days, Mississippi’s famed “Million Dollar Man” Ted DiBiase adopted the phrase: “Every man has his price.”

For his son, that price was $48,000.

On Thursday, Brett DiBiase, also a retired wrestler, admitted to his role in defrauding Mississippi’s welfare agency. This is the latest development within a broader embezzlement scheme that the state auditor’s office is calling the largest in state history. DiBiase, a Clinton, Mississippi native, is now a state’s witness in the case.

The $48,000 he obtained fraudulently represents just 1% of the $4.15 million prosecutors allege that agency and nonprofit officials stole and even a smaller fraction of the $94 million in potential welfare agency misspending the auditor found.

DiBiase, one of six defendants arrested in February, pleaded guilty to making fraudulent statements in front of Hinds County Circuit Court Judge Tomie Green. The crime carries a maximum sentence of five years in prison and a fine of up to $10,000.

In exchange for DiBiase’s plea and agreement to cooperate in the remaining investigation, the district attorney’s office agreed to drop a separate conspiracy charge against the 32-year-old and recommended the judge delay sentencing.

“He’s a homegrown guy,” Hinds County District Attorney Jody Owens told Mississippi Today. “You can’t make this case without some factual witnesses. We think he’s a credible one.”

Owens said it’s possible DiBiase will eventually face no jail time.

The district attorney also alluded to the possibility of additional guilty pleas among the five other defendants. But he said he did expect to take cases of the principal defendants — namely former human services director John Davis and nonprofit owner Nancy New — to trial in 2021.

Before DiBiase could complete the “drug addiction training” that Mississippi Department of Human Services had paid him upfront in 2018 to conduct, the former wrestler said he found himself back in rehab.

DiBiase couldn’t fulfill his contract during his four-month stay at the luxury Malibu, California, treatment facility, but he said he kept the money.

The state alleged DiBiase, Davis and state agency employee Latimer Smith “covered up by trick” that DiBiase hadn’t actually conducted the work for which he was paid.

Davis and Smith pleaded not guilty to charges related to their alleged involvement in the scheme. Nancy New, founder of Mississippi Community Education Center, her son Zach New and the nonprofit’s accountant Ann McGrew also pleaded not guilty to indictments that allege they conspired to convert $2 million in human service funds to the News’ personal businesses.

The News are accused of funneling another $2.15 million through personal investments in a biomedical startup company called Prevacus and its affiliate PreSolMD.

Indictments and a state audit also allege that Mississippi Community Education Center, which eventually hired DiBiase and had been primarily funded by a federal grant called Temporary Assistance for Needy Families, used state grant funding to pay for the retired wrestler’s drug treatment to the tune of $160,000.

Officials did not charge DiBiase with a crime related to this purchase because, Owens said, they do not believe he was not involved in processing the payment. Instead, the indictment against the former human services director alleged that Davis and Nancy New conspired to pay for the rehab stint.

On Thursday, DiBiase presented a $5,000 check to the court — the first installment of his restitution and repayment of the $48,000.

Of the many questionable welfare recipients, only one person has voluntarily returned the money he or she received. Former NFL quarterback Brett Favre received $1.1 million from the New nonprofit to conduct promotional work that the auditor’s office said it found no evidence he actually performed. He publicly promised to repay the funds and has since returned $500,000 to the auditor’s office, where it sits in a custodial account.

Favre is also a notable Mississippi sponsor of the company, Prevacus, where the News allegedly funneled public funds.

All of the alleged fraud occurred at the Mississippi Department of Human Services, an agency that answers to the governor’s office, under the administrations of Davis and former Gov. Phil Bryant. Bryant appointed Davis as agency chief in 2016.

New, accused of the bulk of the theft, told reporters in November that someone directed her to make payments to the founder of Prevacus, but she would not say who.

“We certainly realize that wrongs have occurred that we can’t show occurred, but we know they don’t pass the smell test,” Owens said. “And our hope is that as more people come forward, which they are … we’ll be able to get that missing piece.”

By Anna Wolfe, Mississippi Today