Lawmakers demand reform monitoring welfare funds in wake of embezzlement

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JACKSON, Miss. (WJTV) – The shockwave of this week’s embezzlement uncovered with funds meant to help out those struggling in Mississippi has reached the Capitol Building.

From the governor’s office down to the legislature, lawmakers are shocked and some demand talks on reforming how money is monitored.

Overall we so far know more than $4 million was overtime funneled out of the Department of Human Service funds for personal gains of six people. A scheme that’s piled up into a mess lawmakers have never seen before.

Senator John Horhn of Jackson not holding back his criticism of those put in place at the department of human services and non-profits like the Community Education Center accused of robbing the very people they’re supposed to help.

“It’s all about the money, and it’s not about the money or the support that goes to the poor,” Sen. Horhn said. “It’s about the contractors, the providers, it’s about folks who can basically get rich off the system.”

Those arguments align with the indictments against Dr. Nancy New, head of the Mississippi Community Education Center.

In one count she’s accused of transferring over $2 million of TANF funds from her non-profit’s account to her private business New Learning INC. bank account for her own use.

“The department privatized a lot of the delivery of services and they still spent a lot of that money,” Sen. Horhn continued. “But they spent it for bogus purposes.”

Collaborating with then Director of the Mississippi Department of Human Services John Davis, Dr. New allegedly embezzled $25,000 in United States funds for herself when it was meant to stay in her non-profit to help feed needy families.

Davis is also named as asking Dr. New to use TANF funds to pay for Brett Dibiase rehab at a Malibu facility. New allegedly claimed that money went to Dibiase for teaching drug classes with Restore2 LLC. But those classes never happened, and the money paid for Dibiase’s own drug treatment.

“For the last quarter of a century we’ve seen the punishment of the poor in Mississippi,” Sen. Horhn argued. “Were still seeing all these giant contacts go out making other people very very rich off the backs of the poor.”

Throughout the Capitol Building, certain lawmakers are now calling for reform when it comes to monitoring where taxpayer funds go aiding those in need and regulating private contracts that put state funds in the hands of non-profit organizations.

“As we proceed we need to put safety nets in place that make sure this doesn’t happen again,” Rep. Kabir Karriem of Columbus said. “But I’m encouraging my colleagues to join me as we ask for a hearing.”

“What I wouldn’t like to see is the bill the Senate finance committee took up yesterday,” Sen Horhn feared. “A bill to allow our state auditor to go in and audit the tax returns of poor people, while these millionaires are walking away Scott free. It is shameful.”

There are other embezzlements of public grant funds from Mississippi uncovered in this case including one with Dr. Nancy New and her son Zach New transferring $750,000 from her non-profit to her personal investments in Florida.

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