Mississippi sues Brett Favre, dozens of others over welfare spending scheme

Mississippi sues Brett Favre, dozens of others over welfare spending scheme
Brett Favre was sued in civil court Monday in connection to a sprawling welfare spending scandal in Mississippi. File Photo by Jim Ruymen/UPI | License Photo

May 10 (UPI) -- The Mississippi Department of Human Services has filed a lawsuit against retired football legend Brett Favre, retired professional wrestler Ted DiBiase and more than two dozen other people and companies in a bid to recover millions of dollars in misspent welfare funds.

The department announced Monday in a statement that it had filed the civil lawsuit against 38 parties previously identified in an audit report published in September of having wrongfully received Temporary Assistance for Needy Families funds.


State auditor Shad White, who authored last fall's audit report, said he applauds the filing of the lawsuit and is grateful Mississippi is taking the next step toward securing justice for taxpayers.

"We knew this day would eventually come," he said in a statement. "We will continue to work alongside our federal partners -- who have been given access to all our evidence for more than two years -- to make sure the case is fully investigated."

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The state is seeking to recover some $24 million in misspent funds from TANF, a program to provide assistance to unemployed or low-income Mississippi residents.

According to a copy of the lawsuit obtained by Mississippi Today, John Davis, the former director of the state's Department of Human Services, and Nancy New, the head of non-profit Mississippi Community Education Center, are at the center of this scandal.

The complaint alleges that Davis entered an agreement with New that he would disregard laws so she could distribute TANF funds to family and friends through her organization if she did the same for Davis.

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"That illegal quid pro quo agreement and conspiracy between Davis and New resulted in all of the transfers of TANF funds for non-TANF purposes," the complain states.

The lawsuit states that DiBiase, better known by his wrestler name The Million Dollar Man, is a close friend of Davis and that he along with his two sons received more than $1.7 million in TANF funds from May of 2017 in the scheme.

Concerning Favre, the complaint states he allegedly convinced New and Davis to buy stocks in companies he was affiliated with.

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The document states that he was the largest individual outside investor and holder of corporate stock in Prevacus, Inc., a biotechnology corporation, and he urged a second defendant to solicit New to use MDHS grant money to invest in the company.


He then hosted New, Davis and others at his home where they received a presentation on investing in the company, the complaint states, adding they agreed to invest in Prevacus and also later in its corporate affiliate, PreSolMD, Inc.

The complaint states New's non-profit transferred $1.7 million in funds to Prevacus in January 2019 to secure clinical trial sites in Mississippi to promote an experimental anti-concussion drug developed by Prevacus.

The lawsuit claims that the claimed motive behind the investment was "a sham" concocted to conceal the actual purpose of the transaction, which was to enrich the defendants.

"Moreover, neither the falsely pretended purpose of that agreed $1.7 million transfer of TANF funds to Prevacus, nor the actual purpose, had any relationship to the pursuit of lawful TANF purposes," it states.

In total, Prevacus and PreSolMD received $2.1 million in TANF funds between January and October 2019, which the state is now seeking to recover through the lawsuit.

The state also says Favre was paid $1.1 million in TANF funds for four speeches he never performed.

Bob Anderson, executive director of MDHS, said he was tasked by Gov. Tate Reeves to correct the mistakes of his department and that begins with filing the civil complaint.


"This is our initial complaint, as in any civil lawsuit, as discovery proceeds, we anticipate that additional parties and additional claims may be added or changed as the matter moves forward," he said.

The filing of the lawsuit follows Nancy New and her son, Zack New, pleading guilty late last month in federal court in relation to the scandal, which White called "the largest public fraud scheme in state history."

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