(Photo from MDHS Facebook)
- The U.S. Department of Health and Human Services reminded Mississippi this week that it could face significant penalties over the misspent TANF funds uncovered in 2019.
Mississippi could still face significant penalties from the federal government related to the misspending of upwards of $90 million in welfare funds, the U.S. Department of Health and Human Services conveyed to Department of Human Services executive director Bob Anderson in a letter this week.
Deborah List, Acting Deputy Director with the HHS Office of Family Assistance in the Administration for Children and Families, reminded Anderson that the federal agency rescinded its December 2024 penalty notice in April 2025 “solely to allow additional time for MDHS to review the expenditure records MDHS is obtaining through discovery.”
“One of the subrecipients potentially linked to a significant amount of the fraudulent expenditures had previously refused to provide MDHS with certain documentation and MDHS filed suit in state court to obtain the records,” List outlined in her letter to Anderson on Wednesday.
She then tells Anderson that, as per the April 14, 2025 letter, “ACF will be issuing a subsequent notice of a penalty once MDHS submits any additional relevant documentation, obtained through the state court litigation, and ACF determines whether there is any change, either an increase or a decrease, in the amount of TANF funds ACF concludes was misused.”
List continues by saying the misuse of federal Temporary Assistance for Needy Families, or TANF, funds “is a very serious concern to ACF and the federal government in general.”
HHS is seeking updated information about all steps MDHS has taken since April 2025 “to obtain and review sub-grantee expenditure records obtained through the discovery process, as well as MDHS’s views, if it has any, of whether the new documentation sheds any additional light on the misuse.”
“Although the December 2024 penalty notice was rescinded for the limited purposes described above, MDHS will be subject to a future penalty based on ACF’s assessment of the amount of TANF funds that were misused,” List wrote.
The action from HHS stems from the state’s largest public welfare embezzlement scheme using TANF funds that was brough to light in 2019 when State Auditor Shad White (R) announced his office’s investigation. Since then, multiple persons have been indicted on state and federal charges, and MDHS has also filed civil suits seeking to recoup misspent funds.
Former MSDH executive director John Davis, non-profit operators Nancy and Zach New, Brett DiBiase, Ann McGrew, Jacob Van Landingham, and Christi Webb have pleaded guilty to state and/or federal charges.
Former pro wrestler Ted Dibiase, Jr. is currently on trial in federal court in Jackson for his alleged actions in the scheme. He has previously pleaded not guilty and has been free on bond for nearly three years ahead of the federal trial.
Davis is serving a 32-year sentence for state charges and is awaiting sentencing for the federal charges. All others continue to await their sentencing.
