Federal and State Authorities Work Together to Stop Fraud

October 20, 2020

By Shad White

Corruption is a big enough problem in Mississippi that it won’t be solved by one law enforcement office alone. That’s why my team at the Office of the State Auditor works closely with federal authorities to bring cases to a conclusion.

You’ve seen some of our joint work on display recently. You saw it in the arrest of Mario King, the Mayor of Moss Point, and his wife. They are accused of embezzling money that they raised at a gala. The gala, according to the Mayor, was supposed to benefit mental health counseling at the Moss Point School District. Instead, the money went toward the down-payment of a personal vehicle, cash withdrawals, and the payment of credit card debt to complete the purchase of a pet. 

You saw our joint work in the conviction of George Nangah, a man who was here in the country illegally and stole over $200,000 from the people of tiny Coldwater, Mississippi—a town with a median income $23,000 less than the national average.    

You continue to see our joint work with federal authorities in a case involving the Mississippi Department of Human Services. In February, investigators from my office arrested six individuals who conspired to steal millions in welfare funds. Those arrests put a stop to the fraudulent spending, but there was more work to be done to get to the bottom of the full scheme. Since February we have worked closely with federal investigators to make sure everyone who has broken the law is held accountable. Reporters recently noted that investigators are now seizing the home of Ted Dibiase, Jr., as a part of that joint operation.

And finally, you saw the extent of our cooperation in a series of recent arrests involving the Mississippi Department of Education (MDE). Investigators from the auditor’s office turned over information to federal authorities in 2017 regarding that vendor scheme.

That scheme involved multiple people who used MDE funds to defraud the taxpayers. A former MDE director used her position to engage in bid splitting, where a contract is broken up into smaller pieces to avoid the state’s competitive procurement process. The director would then allegedly award contracts to favored vendors, and the vendors would pay money back to the director.

Our work with federal partners takes a variety of forms. Sometimes we lead investigations, and sometimes we assist. Other times we turn over information to a proper federal authority if a case falls under their jurisdiction. In all these circumstances, though, we know that a strong partnership with federal investigative bodies is vital. In a given year, we might work with the FBI, the IRS, ICE, the Office of the Inspector General, the Secret Service, and others.

Fraud schemes are increasingly complex and stretch across multiple states and countries, so having this relationship with federal authorities is even more important today. One example of this comes from the State of Washington. A few months ago, Washington realized millions were being stolen from its unemployment compensation fund. This is the pool of money that’s supposed to pay unemployment to those who lost their jobs in the pandemic. An international group of fraudsters called Scattered Canary engaged in a fraud scheme that netted over $550 million, making it one of the largest schemes in modern times.

The State Auditor of Washington immediately went to work on the issue, but because the fraudsters are around the country and world, the Secret Service has been tasked with leading the investigation. Not long after that, I was made aware of similar kinds of fraud happening to Mississippi’s unemployment compensation fund. We have been in touch with the Secret Service and other federal authorities to assist them in finding those who are responsible here, too.

Going forward, we’re going to continue to work with our federal partners. As fraudsters work harder and smarter to steal your money, we’re going to use all the brainpower and muscle available to stop them.

Shad White is the 42nd State Auditor of Mississippi