Documents: Tens of millions in taxpayer dollars flowed into nonprofit at center of state’s largest embezzlement scheme

Some federal money intended to help poorest Mississippians lined pockets instead

Embezzlement Investigation: TANF Tracking the money

JACKSON, Miss. (WLBT) - Tens of millions of federal dollars got approved at the highest levels of state government for the organization now at the center of this massive embezzlement scheme, according to federal tax records obtained by 3 On Your Side.

In 2017, records show nearly $13 million in federal grant money flowed into the coffers of the Mississippi Community Education Center, the nonprofit organization used as the vehicle for a massive conspiracy and embezzlement scheme.

That grant money doubled in 2018 to nearly $27 million.

It’s unclear how much of that was actually utilized as intended, to help the poorest Mississippians in difficult times of need.

Documents: Tens of millions in taxpayer dollars flowed into nonprofit at center of state's largest embezzlement scheme
Documents: Tens of millions in taxpayer dollars flowed into nonprofit at center of state's largest embezzlement scheme

Those amounts stand in stark contrast to previous years, where tax forms show the Mississippi Community Education Center brought in -- on average -- $2.5 million in TANF funds.

All of this federal money was approved to be transferred to the nonprofit by the Mississippi Department of Human Services.

Hinds County grand jury indictments show that, months after the latest infusion of cash, Nancy New, her son Zachery and Ann McGrew entered into a conspiracy to steal millions.

It’s believed they did so under the guise of multiple organizations, including the Families First for Mississippi nonprofit organization, which Nancy ran and McGrew served on as chief financial officer, and New Learning, Inc.

Documents: Tens of millions in taxpayer dollars flowed into nonprofit at center of state's largest embezzlement scheme
Documents: Tens of millions in taxpayer dollars flowed into nonprofit at center of state's largest embezzlement scheme

At that time, the News received high praise, including a mention in former Gov. Phil Bryant’s State of the State address last year.

“This Families First platform has become a model of success for thousands of Mississippians and one that is being emulated all across America,” Bryant said.

The indictments show that, days after Bryant’s speech, those illegal transfers from the News began.

The court documents detail six transfers -- starting January 18 and ending October 7 -- totaling $2.15 million, which went toward investment opportunities in Florida.

Shortly after the first transfer, investigators believe then-DHS Director John Davis conspired with Nancy New to embezzle more funds, transferring an unreleased amount from MCEC into bank accounts owned by Rise in Malibu, a drug treatment facility, to pay for former professional wrestler Brett Dibiase’s opioid treatments.

Documents indicate Davis had already conspired with Dibiase and former DHS employee Latimer Smith in November 2018 to pay $48,000 to Dibiase for a professional services contract.

During that time the News transferred another $2 million from MCEC to New Learning, Inc., a for-profit institution managed by the News.

Ultimately, investigators believe all of this money was used for personal and investment use.

While the indictments do not specifically reference Families First for Mississippi, online documentation and the buildings housing these entities show the two are closely associated, and 3 On Your Side has confirmed they’re managed by the same people.

Since news of the indictments broke, Families First’s website was also taken down.

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