Former Tupelo nonprofit operator Christi Webb became the seventh defendant in Mississippi’s $77 million welfare scandal after she pleaded guilty to one federal charge of theft concerning federal funds before Magistrate Judge Keith Ball in Jackson on March 16.
Court documents say she directed nearly $1.1 million to companies owned by former WWE wrestler Teddy DiBiase Jr., who has not been charged with a crime. He is the son of WWE’s “Million Dollar Man,” Ted DiBiase Sr.
Until stepping down last week, Webb was the executive director of the Family Resource Center of North Mississippi, a nonprofit that handled millions in federal funds in coordination with the Mississippi Department of Human Services. The federal dollars included Temporary Assistance For Needy Families funds, which are meant to help poor families with children, and The Emergency Food Assistance Program funds, which provides nutrition assistance to families in need.
Former Mississippi Department of Human Services Director John Davis, who led the Mississippi Department of Human Services from 2016 to 2019, pleaded guilty on federal charges in the case in September 2022; as head of the department, he oversaw the dispensing of federal funds to nonprofits like Webb’s. Davis’ indictment at the time implicated Webb as a “co-conspirator,” though not directly by name. Casey Lott, Webb’s lawyer at the time, told the Daily Journal that month that “it was ‘absurd’ for DOJ to believe she conspired (with) John Davis.”
But in the March 16 bill of information, prosecutors say that “Davis, and at times others, directed WEBB … to award sham contracts purportedly for the delivery of social services to various individuals and entities,” including to two companies owned by retired WWE wrestler Teddy DiBiase, Jr.
The document accuses Webb of “misapplying” $700,000 in TANF funds and $497,987 in TEFAP funds to the companies. A 2021 independent forensic audit paid for by the Mississippi Department of Human Services estimated that FRC misspent $11,539,615 in TANF funds alone between 2016 and 2019. Until resigning last week, Webb had served as the nonprofit’s director since 2005.
Brett DiBiase Pleaded Guilty to Charges
Teddy DiBiase Jr.’s brother, retired WWE wrestler Brett DiBiase, pleaded guilty on charges related to the TANF scandal in December 2020. State officials say Ted DiBiase Sr. also received millions in TANF funds for his Christian ministry from MSDH under Davis’ tenure, though officials have neither accused nor charged him with a crime.
Republican Mississippi State Auditor Shad White and Democratic Hinds County District Attorney Jody Owens first made the public aware of the massive welfare scandal in February 2020 as they announced charges against six individuals, including Brett DiBiase, Davis and nonprofit director Nancy New. New was a nonprofit director for the Mississippi Community Education Center who has since pleaded guilty to both federal and state charges.
Among numerous other allegations at the time of the arrests, Owens and White alleged that Davis and ex-MDHS employee Latimer Smith had “(manufactured) documents to enrich Brett DiBiase using TANF money” and paid DiBiase TANF funds “for teaching classes about drug abuse,” even though DiBiase was “in a luxury rehabilitation for his own drug use in California at the time and did not perform the services.”
Owens and White accused Nancy New and her son, Zach New, of using their nonprofit, the Mississippi Community Education Center, “to pay for DiBiase’s treatment using TANF funds.”
“At Davis’ direction, MCEC used TANF money received from DHS to pay for DiBiase’s opioid treatment at the Rise in Malibu facility,” the 2020 statement said. “The documentation submitted by the News claimed this was to pay DiBiase for conducting training classes that never, in fact, took place.”
Brett DiBiase pleaded guilty to state charges of making false representations to defraud the government in December 2020, and pleaded guilty to additional federal charges earlier this month.
Davis hired Brett DiBiase to work at MDHS in 2017 and he later began working at MCEC. State officials say that, during Davis’ tenure at MDHS, Teddy DiBiase Jr., occupied one of the largest offices at the Mississippi Department of Human Services located next to the director’s own office—even though he was not on the payroll.
Larger Investigation Continues
Last year, text messages from 2017 to 2020 between New, Davis, former Gov. Phil Bryant and retired NFL quarterback Brett Favre about a volleyball stadium project at Favre’s alma mater drew national headlines after they became public in court filings. New’s nonprofit directed millions in federal TANF funds to construct the volleyball stadium.
After the state stopped using TANF funds for the volleyball project, Favre unsuccessfully sought current-Gov. Tate Reeves’ help to attain state funds through a legislative appropriation to pay the remaining amount, text messages the Mississippi Free Press obtained last year showed. Favre also received $1.1 million in TANF funds from MCEC to record promotional materials that investigators say he never performed.
After a demand from the state auditor, Favre paid back the full $1.1 million, but did not pay $228,000 in interest the auditor demanded. Neither Favre nor Bryant has been charged with a crime and both have publicly denied wrongdoing.
New and Webb were both leaders in Families First For Mississippi, a state initiative in cooperation with both women’s nonprofits. While New was primarily a Republican donor with close relationships to top GOP leaders in the state, Webb supported former Mississippi Attorney General Jim Hood, a Democrat, in his 2019 campaign for governor against Reeves; FRC employed his wife, Debbie Hood. In 2017, Hood’s office, along with the Mississippi Institutions of Higher Learning, approved the contract for the volleyball project. Neither Hood, his office nor any IHL officials have been accused of wrongdoing.
In an April 2022 plea agreement, Nancy New’s son, Zach New, claimed that he “acted with” his mother “and others, at their direction, to disguise the USM construction project as a ‘lease’” to circumvent prohibitions on using TANF block grants for “brick and mortar” construction projects.
Though Webb’s sentencing is set for June 16, it could be delayed; so far, neither federal nor state courts have sentenced any of the seven defendants charged in the welfare scandal as investigations continue. Webb is out on an unsecured $10,000 bond and faces up to 10 years in prison or a $250,000 fine.
The Daily Journal reported on March 16 that Casey Lott has stepped down as Webb’s attorney. The court appointed a public defender, Abby Brumley Edwards, to represent her instead.
“Casey Lott, Webb’s previous attorney and current FRC board member, maintained last year that while she led the nonprofit, Webb was the only person who pushed back on Davis’ requests to funnel money to projects not authorized under the Temporary Assistance For Needy Families programs,” Daily Journal’s Taylor Vance reported on March 16.
Though federal prosecutors allege that New personally profited from misspent federal and state funds, court documents do not accuse Webb of ever personally benefiting from misspent federal funds.
The State of Mississippi is currently suing dozens of individuals and entities who state lawyers allege directed or received misspent funds in civil court in an effort to claw back millions including Davis, all three DiBiases, Favre, New and Webb. Multiple defendants in the civil suit are challenging the state’s claims.
Click here to see our #MSWelfareScandal archive dating back to February 2020.
