JACKSON, Miss. (WLBT) – The U.S. government will reveal starting next week what took years to piece together: Mississippi’s largest public embezzlement scheme and the plot that ensnared nearly a dozen people.
Jury selection for Ted DiBiase Jr.’s trial is set to begin in four days. The former wrestler is the only person charged in the scandal who has decided to fight charges of money laundering, theft, wire fraud and conspiracy.
DiBiase could still reach a plea deal before the trial begins.
Accusations and allegations
DiBiase is accused of pocketing nearly $4 million in welfare payments, hiding the money through bogus contracts, and then using the money for his own benefit.
He will walk into a courtroom where everyone else connected to this plot has already pleaded guilty, admitted what they did and decided to help federal investigators fill in the gaps in their investigation.
“It’s a lot harder because everyone they’ve pointed the finger at is willing to go to court and make the government’s case,” said Matt Steffey, a professor at Mississippi College School of Law. “If they didn’t have cooperating witnesses, the case would be much more difficult [to prosecute]. When it’s just you standing, I think from the outside it seems hard to defend.
Key characters in the plot
The only person convicted for his crimes is the former head of the Department of Human Services, John Davis. A judge sentenced him to 32 years in prison on state charges, but he has not yet been sentenced for his federal crimes.
Davis, the highest-ranking person charged in the scandal and a central figure in the conspiracy, ensured that tens of millions of dollars went to certain nonprofits that then converted that money for personal use.
Nancy New, director of the nonprofit that received most of the welfare, pleaded guilty to state and federal charges three years ago, but her sentencing remains delayed. His son, Zach, also pleaded guilty but was not sentenced. Both have been out on bond since their plea agreements.
The newspaper was accused of embezzling millions of dollars in public assistance funds, investing much of it in private companies. The funds were also used to fund drug treatment services in California.
Nancy New was the founder of the popular New Summit School in northeast Jackson and owned the Mississippi Community Education Center, a nonprofit organization responsible for distributing TANF funding to families on behalf of DHS.
Ted DiBiase Jr.’s brother, Brett, pleaded guilty to state and federal charges but was not convicted.
Christi Webb, a former director of another nonprofit involved in taking the money, was also not convicted.
The case of Latimer Smith, a former DHS employee, is under seal and it is unclear whether that case remains active.
Impact on sentencing
What happens at the first trial will also determine how those who have already pleaded guilty will be punished.
Steffey said he didn’t think their fate would depend on DiBiase’s conviction.
“I think what matters most is what the prosecutor thinks about his level of cooperation,” Steffey said. “If they cooperate in a way that satisfies the prosecutor, even if, for example, the jury hangs or acquits Mr. DiBiase, I would not expect and I certainly hope that it will not have a significant impact on the cooperating witnesses. You know, everyone has to do their part. And then we leave the results to someone else.”
It remains unclear whether other information prosecutors are seeking from cooperating witnesses implicates anyone else to the point where more charges could be filed.
In the six years since that scandal became public, text messages and speculation from co-conspirators have suggested that former Gov. Phil Bryant and former NFL great Brett Favre may have played criminal roles. But neither individual was criminally charged and both sued media outlets for implying they were guilty.
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