The lawsuit, filed in Hinds County Circuit Court, aims to recover the more than $ 20 million in cash it claims the defendants “squandered” from the Temporary Assistance for Needy Families anti-poverty program.
“I do not understand these people,” attorney Brad Pigott, who wrote the lawsuit, told Mississippi Today. “What kind of person would decide that money the law required to be spent helping the poorest people in the poorest state would be better spent being doled out by them to their own families, their own pet projects, and their own favorite celebrities?”
The lawsuit was filed just weeks after the mother and son duo of Nancy New, 69, and Zachary New, 39, pleaded guilty to state criminal charges over the misspending. The duo agreed to testify against others in the corruption case, which auditor Shad White said was Mississippi’s largest in the past two decades.
They ran a nonprofit group and education company in the state, which received tens of millions of dollars under contracts with the Mississippi Department of Human Services; however, much of the money was illegally funneled to other nonprofits or contractors, considered “second-tier” recipients of the department, the outlet reported.
Some of the welfare money was spent on drug rehabilitation in California for former pro wrestler Brett DiBiase. He was named as a defendant in the lawsuit, along with his father and brother, Ted DiBiase Sr. and Ted “Teddy” DiBiase Jr.
In 2020, Nancy and Zachary, along with former Mississippi Department of Human Services executive director John Davis and three other people, were charged in state court over the misspending.
Last year, White demanded repayment of $ 77 million of misspent welfare funds, which included $ 1.1 million paid to Favre, who lives in Mississippi and has not been charged with any wrongdoing.
White accused Favre of being paid for speeches and not showing up. Favre has stated he didn’t know the money came from welfare funds and noted his charity has provided millions in cash to help children in poverty in Mississippi and Wisconsin.
The lawsuit on Monday claims Favre was once the largest individual outside investor and stockholder of Florida-based company Prevacus, which was attempting to develop a concussion drug. The suit claims that in December 2018, Favre hoped Prevacus CEO Jake VanLandingham would ask Nancy to use the welfare money to invest in the company.
In January 2019, Favre hosted a Prevacus stock sales presentation at his home that was attended by many of the defendants, where an agreement was reached to spend “substantial” welfare grant money on Prevacus and its corporate affiliate PreSolMD Inc.
The suit claims the stock was in the names of Nancy and Zach but was also for the financial benefit of Favre, VanLandingham, and the two companies. It demands repayment of $ 2.1 million in welfare grant money that was improperly paid to the two companies that year.
Favre’s longtime agent James “Bus” Cook did not immediately respond to a request for comment from Fox News Digital.
The expected filing comes months after the auditor’s office turned over demands for repayment of the misspent funds to the attorney general’s office.
“I applaud the team filing this suit and am grateful the state is taking another step toward justice for the taxpayers,” White said. “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.”
Attorney General Lynn Fitch and Gov. Tate Reeves said in a joint statement Monday: “Our purpose with this suit is to seek justice for the broken trust of the people of Mississippi and recover funds that were misspent.”
The Associated Press contributed to this report