Former Mississippi DHS Accountant Will Testify Against Others In Massive Embezzlement Case

An accountant involved in a a major embezzlement scheme has pleaded guilty to her role in a staggering theft of welfare money in Mississippi, the poorest state in the U.S.

Hinds County Circuit Court records show Anne McGrew, 65, of Jackson, agreed to testify against co-conspirators who are indicted in the case. That includes her former employers, Nancy and Zach New, the mother and son team who ran nonprofit and for-profit operations entrusted by the Mississippi Department of Human Service to distribute money to people in need.

McGrew pleaded guilty on Monday to one charge of conspiracy to commit embezzlement. She told the court that she helped the News and others to move money provided to the nonprofit Mississippi Community Education Center to an account owned by New Learning Inc., a for-profit company owned by the News.

For more reporting from the Associated Press, see below.

Nonprofit Scam Mississippi
FILE - In this Sept. 7, 2016 file photo, John Davis, then executive director of the Mississippi Department of Human Services, answers lawmakers questions at a hearing at the Capitol in Jackson, Miss. Special agents from the office of State Auditor, have arrested Davis, and several others in connection with a multi-million dollar embezzlement scheme. The indictments include a range of violations involving fraud and embezzlement. Rogelio V. Solis, File/AP Photo

McGrew, who could face up to five years in prison, signed a court document that said prosecutors will make a recommendation about her sentence based on her cooperation in the prosecution of co-defendants and her "willingness to provide truthful testimony" at any trials.

McGrew was among six people indicted in early 2020 in what state Auditor Shad White called "a sprawling conspiracy" of alleged misspending by the Mississippi Department of Human Services.

Those indicted were the department's former director, John Davis; former professional wrestler Brett DiBiase; former Department of Human Services employee Latimer Smith; Nancy New, who has been the director of the Mississippi Community Education Center and New Learning Resources; Zach New, who has been assistant executive director of the education center; and McGrew, an accountant for the education center.

Davis left the Department of Human Services in July 2019. He has pleaded not guilty and his trial is set for November 1. However, his attorneys are seeking a delay because they said in a September 29 court document that prosecutors have produced "voluminous" information about the case.

Smith has pleaded not guilty, and his trial is scheduled to begin November 8.

Nancy New and Zach New also have been indicted on federal charges. They have pleaded not guilty in federal court and state court, and they await trial in both places.

Mississippi Community Education Center, operating as Families First for Mississippi, received more than $44 million in government grants from mid-2014 to mid-2018, according to nonprofit tax filings. Amounts spiked to $12.9 million and $26.7 million in the final two years, as Davis outsourced a large portion of Mississippi's Temporary Assistance to Needy Families spending to the group.

DiBiase, now 33, pleaded guilty in December to one count of making a false statement. He said in court documents that he had submitted documents and received full payment for work he did not complete. He agreed to pay $48,000 in restitution, and his sentencing was deferred.

Indictments allege Davis conspired with Nancy New to send $48,000 in block grant money to pay for DiBiase's drug rehabilitation in Malibu, California, in early 2019. Payments were made to a company owned by DiBiase supposedly for his teaching classes about drug abuse, with Davis and Smith falsifying invoices and other records, prosecutors said.

In November 2020, Hinds County Circuit Judge Faye Peterson issued a gag order to prevent prosecutors, defense attorneys and others from publicly discussing the case against Nancy New. Another Hinds County circuit judge, Adrienne Wooten, issued the same order in February in McGrew's case.