Mississippi Today
Welfare agency settles with eight defendants in fraud lawsuit
More than two years into the litigation, the state of Mississippi has agreed to settle with eight defendants in the ongoing welfare fraud civil case for a total of about $750,000.
That’s roughly half as much as the state has spent on legal fees in the case so far.
The eight defendants, who allegedly illegally received or were liable for the misspending of a total of $1.7 million, did not admit to wrongdoing. Their settlements represent some of the smaller components of the overall welfare fraud scheme. The future repayments amount to less than 1% of the total $79 million in federal welfare funds that Mississippi Department of Human Services’ lawsuit claims were lost to malfeasance.
The defendants, date and amount of settlement, and total alleged damages are as follows:
- Chase Computer Services, August 2024, $1,000 out of $375,750
- Southtec, August 2024, $10,000 out of $19,000
- Lobaki, April 2024, $300,000 out of $795,000
- Williams, Weiss, Hester & Company, April 2024, $220,000 out of an undetermined amount
- William Longwitz and Inside Capitol, March 2024, $318,325 out of $318,325
- Rise Luxury Rehab, October 2023, $105,000 out of $160,000
- Warren Washington Issaquena Sharkey Community Action Agency, January 2023, $49,190.06 out of $49,190.06
Each of these companies received funds from the federal Temporary Assistance for Needy Families block grant, or TANF, from the two private nonprofits โ Mississippi Community Education Center and Family Resource Center of North Mississippi โ running a program called Families First for Mississippi. The program operators, who received as much as $40 million a year, were supposed to channel resources to help stabilize poor families and prevent child neglect but instead frittered the funds away on contracts with politically connected companies.
Mississippi Department of Human Services said it could not comment on the settlements due to Hinds County Circuit Court Judge Faye Peterson’s suppression order in the case, which has prevented parties from discussing the situation publicly. Defendants who have been released from the case are no longer bound by the gag order, and representatives of virtual reality tech firm Lobaki agreed to share their story with Mississippi Today in a piece published in April.
โWe didn’t know the difference between TANF and a frickin’ turnip patch, you know?โ Lobaki President Kevin Loud said at the time.
Will Longwitz, a former Madison County Court Judge, state senator and legislative lobbyist currently working as a personal injury lawyer in New Orleans, settled with MDHS in March for the total amount of TANF funds auditors say he received โ $318,325.
The lawsuit alleged the nonprofits hired Longwitz’s firm Inside Capitol to lobby lawmakers on behalf of Families First, though federal regulations prohibit the use of TANF funds for lobbying activities. He registered as a lobbyist for MCEC in 2018 but reported receiving no compensation from the nonprofit, despite the six-figure income. He also reported spending zero on food, gifts or entertainment for public officials.
MCEC hired four other lobbyists during the time of the scandal, but it paid Longwitz by far the most โ nearly $320,000 compared to between $21,000 and $72,000 for each of the others. The lawsuit alleged Longwitz knew the money he received came from the welfare fund.
Longwitz, who represented himself in the litigation, denied the allegations, repeating legalese and referring to himself as a releasee in an email to Mississippi Today Monday. โReleasees specifically and categorically deny any and all liability with regard to all claims and allegations, and settle the claims only to buy their peace and avoid further cost of defense,โ he wrote.
Longwitz agreed to a monthly payment schedule and will have until 2033 to pay the entire amount.
Only one other defendant, Warren Washington Issaquena Sharkey Community Action Agency (WWISCAA) settled for the total amount of damages, $49,190.06, that MDHS alleges it caused. The original May 2022 lawsuit accused the nonprofit of failing to perform the services, such as academic tutoring and career skills development, it was hired to provide. Emails Mississippi Today previously obtained suggested that the organization’s partnership with Families First was a sham.
โThey were absolutely doing nothing in either center,โ said a social worker who was employed under the program, according to an email.
WWISCAA’s January 2023 settlement denied any wrongdoing and its director Jannis Williams declined to comment.
The Greenville-based Community Action Agency was founded in 1972 as one of the local nonprofits across the nation tasked with administering federal anti-poverty funds, primarily the Community Services Block Grant. Throughout its recent legal battle, WWISCAA seems to have maintained its normal partnership with Mississippi Department of Human Services, receiving roughly $5 million a year from the welfare agency.
In the settlements so far, Chase Computer Services, owned by Christopher Scott Chase, received the best deal by dollar amount.
MDHS claimed the nonprofits hired the tech company to develop software to track outputs and performance of the Families First program, but that it never provided the service, and it should repay the agency $375,750.
The company denied the allegations. The parties settled for just $1,000 last week. According to his LinkedIn page, Chase has worked as a senior developer at the Tupelo-based American Family Association since 2023, and the Chase Computer Services website says it is no longer accepting new clients. Chase did not respond to an email from Mississippi Today.
The lawsuit similarly accused Southtec of not completing all of the work โ installing internet network and phone systems in Families First offices โ that it was prepaid to conduct. MDHS claimed Southtec caused $19,000 in damages related to overages on a hotspot that it was using on Family Resource Center’s dime. They settled for $10,000 this month.
The vendor whose welfare payments raised some of the first red flags in the welfare fraud investigation โ Rise Luxury Rehab โ settled with MDHS back in October. For four months in 2019, former MDHS Director John Davis instructed Mississippi Community Education Center to pay $40,000 a month for his friend Brett DiBiase to be treated at the luxury rehab facility in Malibu. The company agreed to pay back $105,000 of the total $160,000 it received. Its lawyer did not return an email.
MDHS had alleged in the lawsuit that Williams, Weiss, Hester & Company, the accounting firm in charge of auditing Mississippi Community Education Center’s finances, had completed a โbogusโ audit in 2017 that concealed the nonprofit’s use of TANF funds.
The lawsuit asked for damages, which would have been determined at trial, totaling the amount of the nonprofit’s misspending that the agency would have allegedly caught if the firm had performed a proper audit. MDHS settled with the accounting firm in April for $220,000.
In an emailed statement to Mississippi Today, firm owner Doug Hester maintained that his company had not committed professional malpractice.
โUnfortunately, obtaining vindication in a lawsuit of this magnitude with this many parties is extremely expensive and time consuming, so WWH made a business decision to settle the case and buy its peace rather than continue with a lengthy and expensive court battle,โ Hester wrote.
Mississippi Community Education Center, its founder Nancy New, and her son Zach New also filed their own lawsuit against Williams, Weiss, Hester & Company in 2021 claiming that they relied on the accounting firm to ensure the nonprofit was spending its funds properly and that the accounting errors caused the News to be charged criminally. The News dropped the case in February.
Judge Peterson signed orders dismissing Chase Computer Services and Southtec from the case last week. She dismissed Lobaki and Williams, Weiss, Hester & Company from the case in April. Warren Washington Issaquena Sharkey Community Action Agency was removed from the lawsuit when the state filed its amended version in December of 2022. The court file does not yet contain orders of dismissal for William Longwitz, Inside Capitol, or Rise Luxury Rehab.
Mississippi Department of Human Services has paid Jones Walker, the law firm bringing the litigation, nearly $1.5 million in TANF funds since 2022, according to the state’s public accounting database. The stated purpose of the lawsuit is to clawback the misspent TANF funds.
Thirty-eight defendants remain, including Brett Favre and the University of Southern Mississippi Athletic Foundation, who together allegedly worked to channel $5 million in welfare funds to build a volleyball stadium on the college campus. They’ve also denied wrongdoing.
MDHS claims Favre is also on the hook for $2.1 million that the New nonprofit funneled to pharmaceutical companies that he sponsored. An alleged co-conspirator in that scheme, Jake Vanlandingham, pleaded guilty to a federal wire fraud charge last month.
Some of the defendants facing the biggest alleged damages, such as Davis and nonprofit operators Nancy New and Christi Webb, have already pleaded guilty to criminal charges related to the scheme and will likely have to pay restitution for their crimes.
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
Crooked Letter Sports Podcast
Podcast: New Orleans sports columnist and author Jeff Duncan joins the podcast to talk about his new Steve Gleason book and the new-look New Orleans Saints.
Jeff Duncan went from the Mississippi Book Festival in Jackson on Saturday to Jerry World in Dallas on Sunday where he watched and wrote about the Saints’ total dismantling of the Dallas Cowboys. We talk about both events and also about what happened in high school and college football last weekend and what’s coming up this weekend.
Stream all episodes here.
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
Mississippi Today
On this day in 1899
Sept. 18, 1899
Scott Joplin, known as โthe King of Ragtime,โ copyrighted the โMaple Leaf Rag,โ which became the first song to sell more than 1 million copies of sheet music. The popularity launched a sensation surrounding ragtime, which has been called America’s โfirst classical music.โย
Born near Texarkana, Texas, Joplin grew up in a musical family. He worked on the railroad with other family members until he was able to earn money as a musician, traveling across the South. He wound up playing at the World’s Fair in Chicago in 1893, where he met fellow musician Otis Saunders, who encouraged him to write down the songs he had been making up to entertain audiences. In all, Joplin wrote dozens of ragtime songs.
After some success, he moved to New York City, hoping he could make a living while stretching the boundaries of music. He wrote a ragtime ballet and two operas, but success in these new forms eluded him. He was buried in a pauper’s grave in New York City in 1917.
More than six decades later, his music was rediscovered, initially by Joshua Rifkin, who recorded Joplin’s songs on a record, and then Gunther Schuller of the New England Conservatory, who performed four of the ragtime songs in concert: โMy faculty, many of whom had never even heard of Joplin, were saying things like, โMy gosh, he writes melodies like Schubert!’โ
Joplin’s music won over even more admirers through the 1973 movie, โThe Sting,โ which won an Oscar for the music. His song, โThe Entertainer,โ reached No. 3 on Billboard and was ranked No. 10 among โSongs of the Centuryโ list by the Recording Industry Association of America. His opera โTreemonishaโ was produced to wide acclaim, and he won a Pulitzer Prize in 1976 for his special contribution to American music.ย
โThe ragtime craze, the faddish thing, will obviously die down, but Joplin will have his position secure in American music history,โ Rifkin said. โHe is a treasurable composer.โ
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
Mississippi Today
Insurance chief Chaney hopes Mississippiโs homeowner rates are stabilizing
Mississippi Insurance Commissioner Mike Chaney says he is hopeful that the homeowner insurance rates that have spiked in recent years are now beginning to stabilize.
Chaney said he is hopeful that legislation passed during the 2024 session that provides grants to help homeowners put more wind resistant roofs on their homes will help lower the cost of premiums. He said the Legislature placed $5 million in the program.
โWhile this will help launch the program, the Legislature will need to provide additional annual funding well above this amount so that the program can provide the necessary benefits to reach a significant number of policyholders across our state,โ Chaney said via email.
While homeowners’ insurance rates in Mississippi have risen significantly, the increases have been less than in many surrounding states, according to various studies.
Chaney said his agency, which regulates the insurance industry in Mississippi, has received requests for double digit increases.
โWe worked with companies to consider less than what their indicated need was โฆ We feel that rate pressures will begin to stabilize along with inflation. Some companies that requested rates over 15% last year are now seeing a much lesser need โ many are now in single digits,โ Chaney said.
Inflation and the frequency of severe weather causing insurance claims are the two primary reasons for the increases in the homeowners’ insurance rates, according to Chaney.
Earlier this year the U.S. Senate issued a report addressing the rising costs of homeowners insurance premiums. The Democratic majority cited weather associated with climate change as the primary reason for the increase. Republicans discounted climate change and blamed the increase on inflation.
According to data compiled by Insurance.com and updated this month, the average cost of a policy for a $300,000 home in Mississippi is $3,380 per year, which is $779 or 30% above the national average.
The cost in Mississippi, though, is lower than many other Southern states. For instance, the cost in Louisiana is 38% above the national average and 52% above the national average in Arkansas. Florida is 70% above the national average while Texas is 48%. Other Southern states — Georgia, Alabama, Tennessee and Kentucky — are below the national average.
Realtor Magazine in May cited a report from Insurify, a virtual insurance company, saying, โThe states with the highest home insurance costs are prone to severe weather events. Florida, Louisiana, Texas, Arkansas and Mississippi are vulnerable to hurricanes. Texas, Colorado and Nebraska face a growing wildfire risk. Nebraska, Texas and Kansas are at high risk for tornadoes, being located in an area nicknamed โTornado Alley.’โ
Chaney said there are two types of processes for how insurance companies get rate increases. He said Mississippi is โa prior approvalโ state where the companies must receive approval from the regulator before an increase can be enacted. Other states –file and use states โ allow the company to enact the increase before receiving approval.
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
-
Mississippi News Video5 days ago
Woman arrested after reposting school threat in Calhoun County
-
News from the South - Louisiana News Feed5 days ago
Food drive underway for Hurricane Francine victims in Kenner
-
Mississippi Today2 days ago
On this day in 1925
-
Crooked Letter Sports Podcast7 days ago
Podcast: The Clevelands pay tribute to native Mississippian James Earl Jones and also discuss a full weekend of football, from high schools to the NFL.
-
News from the South - Kentucky News Feed4 days ago
The search for Joseph Couch intensifies
-
News from the South - Alabama News Feed2 days ago
Diddy Arrested In Manhattan | September 16, 2024 | News 19 at 10 p.m.
-
News from the South - Alabama News Feed4 days ago
Sylacauga Church welcomes Haitian migrants amid speculations
-
Mississippi Today2 days ago
Another Midwest drought is causing transportation headaches on the Mississippi River