John Davis, the former executive director of the Mississippi Department of Human Services (MDHS), testified in federal court that former professional wrestler Ted DiBiase Jr. was aware that the funds he received were federal monies intended for needy families. Davis appeared as a witness for the prosecution on the fifth day of DiBiase Jr.’s trial, which centers on charges of misappropriating federal welfare funds.
DiBiase Jr. faces a 13-count federal indictment that includes charges of conspiracy, wire fraud, theft concerning programs receiving federal funds, and money laundering. Federal prosecutors allege that DiBiase Jr. fraudulently obtained millions of dollars through contracts for services that were either not performed or were substantially inflated in value. The funds in question were part of the Temporary Assistance for Needy Families (TANF) block grant, a federal program designed to provide financial assistance to low-income families with children.
Testimony Links Defendant to Knowledge of Fund Source
During his testimony, John Davis stated that DiBiase Jr. knew the money directed to his companies originated from federal anti-poverty grants. Davis, who led the MDHS from 2016 to 2019, told the court that he and DiBiase Jr. communicated regarding the source of the funding. Davis previously pleaded guilty in 2022 to state and federal charges related to the misuse of welfare funds and is cooperating with the government as part of his plea agreement.
Prosecutors presented text messages between Davis and DiBiase Jr. as evidence during the proceedings. In one exchange, Davis reportedly referenced “money bags” in a message to DiBiase Jr.. Another text message from DiBiase Jr. to Davis read, “I have seen first hand with my own eyes what a letter with the state seal & endorsement from the Governor himself can do”. Davis testified that the two discussed potential business ventures, including purchasing property together.
The prosecution questioned Davis about DiBiase Jr.’s daily activities while under contract. Davis described DiBiase Jr. as “being a shadow” who would accompany him to meetings, including those at the governor’s office. Davis testified that DiBiase Jr. received payments averaging approximately $30,000 per week, while some agency employees earned annual salaries of roughly $18,000.
Charges and Defense Arguments
The indictment alleges that DiBiase Jr. used the federal funds to purchase personal assets, including a vehicle, a boat, and a down payment on a residence in the Reunion subdivision of Madison, Mississippi. Prosecutors assert that contracts were awarded to DiBiase Jr.’s companies, Priceless Ventures LLC and Familiae Orientem LLC, ostensibly for delivering social services such as leadership training and assessing food assistance needs. The government contends these were “sham contracts” and that the services were not adequately provided.
Defense attorneys for DiBiase Jr. argue that their client was a lawful contractor who performed the work required by his agreements. In opening statements, the defense posited that DiBiase Jr. was manipulated by John Davis, portraying Davis as the architect of the scheme who directed the flow of funds. The defense maintains that DiBiase Jr. acted in good faith and was not part of a conspiracy to defraud the government.
Context of the Mississippi Welfare Case
The trial of Ted DiBiase Jr. is part of a broader investigation into the spending of TANF funds in Mississippi. State Auditor Shad White has described the situation as the largest public embezzlement case in state history, involving the diversion of approximately $77 million to $100 million in welfare funds.
The investigation found that MDHS, under Davis’s leadership, directed TANF funds to two nonprofit organizations: the Mississippi Community Education Center (MCEC) and the Family Resource Center of North Mississippi (FRC). These nonprofits then distributed funds to various individuals and entities. Other individuals implicated in the broader case include Nancy New and Zach New, who operated the MCEC, and DiBiase Jr.’s brother, Brett DiBiase. Brett DiBiase pleaded guilty to conspiracy to defraud the United States in March 2023.
The case has drawn attention to the disparity between the funds allocated to high-profile figures and the assistance provided to eligible families. During the period when millions were allegedly diverted, the approval rate for individual TANF cash assistance applications in Mississippi was recorded at 1.42% in 2017.
The trial continues with further testimony expected. Following the conclusion of the prosecution’s direct examination of John Davis, the defense will have the opportunity to cross-examine him. Ted DiBiase Jr. has pleaded not guilty to all charges and remains free on bond.
