Alleged TANF Fraud Follows Years of Individual Recipient Rejections

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The State Auditor's office caused shock waves last week when it unveiled the largest case of alleged public embezzlement in Mississippi history, but the Jackson Free Press reported as far back as 2016 that then-Mississippi Department of Human Services Executive Director John Davis was not allocating $35 million in federal Temporary Assistance for Needy Families, or TANF, funds to the poor people who were supposed to receive the money.

At the time, Davis argued that he had done all that he legally could to get TANF money to needy families, even with the additional funds left on the table.

In the indictments, State Auditor Shad White and Hinds County District Attorney Jody Owens accuse Davis of fraudulently diverting the public welfare funds through a series of educational nonprofits. They allege that defendants, including Mississippi Community Economic Center Executive Director Nancy New and former professional wrestler Brett DiBiase used diverted TANF funds to subsidize their own lifestyles. The indictments allege that they laundered the money "through various fund transfers, fraudulent documents, at least one forged signature, and deceptive accounting measures."

The State is not allocating TANF funds to subgrantee organizations as the current investigation unfolds. Gov. Tate Reeves acknowledged to media last Thursday that DHS had ordered a near-total freeze on TANF distribution during the investigation of the alleged fraud. "We felt like the integrity of the TANF funds—and specifically the fact that they are almost exclusively federal funds—we had to get a handle on the use and the misuse of those funds," he said. Reeves, though, clarified that TANF funds for individual families were not subject to the freeze.

'Welfare Queen' Mythology

The State of Mississippi refusing to distribute money allocated to help the poor is not new. The Jackson Free Press reported in 2017 that the State has winnowed down TANF payments directly to

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