At the time State Auditor Shad White announced arrests in what he called a historic public embezzlement bust, which involved officials funneling welfare funds to a pharmaceutical startup, White had information that Gov. Phil Bryant was a âkey team memberâ in that company, a new lawsuit alleges.
In the four years since, the complaint from a defendant in the case alleges that White and the Mississippi Department of Human Services has âactively concealed Bryantâs roleâ in the scandal.
Investigators gathered text messages revealing that during Bryantâs last year in office, the governor consulted Jake Vanlandingham, the CEO of the experimental concussion drug firm called Prevacus, and former NFL quarterback Brett Favre while hundreds of thousands of federal welfare funds flowed to their project. Texts show Bryant, who as governor oversaw the welfare agency, then agreed to accept interest in the company after he left his post.
The texts, first publicly surfaced by Mississippi Todayâs investigative series âThe Backchannel,â would prove to be crucial evidence in both the ongoing criminal and civil investigations.
But officials withheld the relevant texts from Nancy New, who was charged with fraud for funneling the funds to Prevacus, for over two years, a new court filing alleges. New, who claims she was acting on the governorâs direction, didnât even allegedly have access to the documents when she pleaded guilty to the state charges in April of 2022.
âMost damning perhaps, OSA (Office of the State Auditor) failed to produce Vanlandinghamâs phone and text messages to Nancy New and Zach New in criminal discovery,â reads a new third-party complaint against Bryant from Newâs son Jess New. âInstead, OSA withheld evidence from the News until long after a plea had been entered in state court.â
In response, a spokesperson for the auditorâs office said it would have been the responsibility of the prosecutor, in this case the Hinds County District Attorneyâs Office, which secured the initial indictments, to release discovery materials.
âThe Auditorâs Office turned over all evidence to the Hinds County District Attorneyâs Office in a timely manner well before any guilty pleas were entered,â the auditorâs spokesperson Fletcher Freeman said in a statement. âThis is a desperate attempt to try and discredit not only the State Auditorâs Office but also the Hinds County District Attorneyâs Office, which together stopped the largest public fraud scheme in Mississippi history.â
Hinds County District Attorney Jody Owens similarly said in an email that his office has a legal duty to serve all criminal defendants with discovery. âDespite Mr. Newâs claims, the Hinds County District Attorneyâs Office did not deviate from its discovery obligations in this case, and all material was timely disclosed pursuant to Mississippi law. Any claim to the contrary is simply false,â he wrote on Wednesday.
Jess New, a Jackson attorney and director of the Mississippi Oil and Gas Board, is a defendant in the extensive civil litigation MDHS has filed against 47 people or companies in an attempt to recoup the misspent funds. MDHSâs complaint alleges Jess New received welfare funds as a contractor for his momâs nonprofit Mississippi Community Education Center and attempted to profit from personal interest in the pharmaceutical project. While his mother and brother Zach New have pleaded guilty to state charges, Jess New has not been charged criminally.
On Wednesday, Jess New requested the judge allow him to file a third-party complaint against Bryant, who is not a defendant of the civil suit. While other defendants have asked that Bryant be added to the suit, this is the first time a defendant has attempted to actually bring a complaint against Bryant.
âMDHS has labeled the use of welfare grants to fund Prevacus as âan illegal transaction,â yet MDHS continues to refuse to include Bryant as a Defendant despite overwhelming evidence of Bryantâs principal role in the âillegalâ transaction,â reads Jess Newsâ complaint, filed by his attorney Allen Smith.
An attorney for Bryant, who has not been charged in the state or federal welfare scandal-related cases, did not respond to Mississippi Todayâs request for comment on Wednesday.
A gag order in the case has prevented parties or their counsel from providing any information or clarification to the public. The complaint details Bryantâs entanglement with Prevacus starting with their introduction in late 2018 until the arrests in 2020, using much of the same written communication included in countless news reports and court filings.
Whatâs unique about Jess Newâs filing this week is how it describes the events leading up to the arrests and the flow of information afterwards â raising questions about exactly what law enforcement knew when.
White began quietly investigating the welfare agency in mid-2019 when he learned about suspicious payments by then-MDHS Director John Davis to professional wrestling brothers Brett and Teddy DiBiase.
Investigators eventually unearthed checks from Newâs nonprofit to a concussion drug firm called Prevacus and subpoenaed Vanlandingham for documents in late December of 2019.
âOn January 23, 2020, Vanlandingham responded by forwarding emails and documents to OSA that expressly mention Bryant and indicate his involvement with Prevacus since 2018,â Jess Newâs complaint reads.Â
The email was dated Dec. 29, 2018 â just three days after Bryant attended a dinner for Prevacus and four days before Davis and New met with Vanlandingham and Favre âat Bryantâs direction,â the lawsuit alleges, to commit the funding.
âGovernor Bryant is very supportive of future relations including drug clinical trials and manufacturing in the State of Mississippi,â Vanlandinghamâs email reads. âI would like nothing more than to work with you all and Brett to bring benefit to Southern Miss University as well.â
The lawsuit alleges Vanlandingham attached a document listing âkeyâ Prevacus âteam members,â which included Bryant. In another email he produced to the auditorâs investigator, Vanlandingham told his investors that a âgreat deal of this has been funded with the help of folks in Mississippi including the Governor.â
âBryant is a necessary party to this lawsuit, but the State of Mississippi, through MDHS and OSA, have actively concealed Bryantâs role. Bryantâs joinder as a Defendant is essential to Jess Newâs ability to adequately defend himself,â Jess Newâs complaint reads. âMDHS seeks to improperly blame Jess New for grant funds that Bryant directed to Prevacus. Jess New is entitled to show the jury that Bryant directed these grant funds to Prevacus while Governor in order to benefit himself, personally, and his business associates.â
In mid-January of 2020, while Vanlandingham was dealing with the subpoena from the auditorâs office, he was simultaneously making arrangements with Bryant to give him âa company package for all your help.â Bryant had just left office; texts indicate he was waiting until that date to enter into business with Prevacus. Shortly after, Bryant joined a new consulting firm and by Feb. 4, 2020, he was confirming a meeting date and location with Vanlandingham.
The same day, a Hinds County grand jury handed down indictments against the welfare officials. Equipped with at least some documents indicating Prevacusâ connection to welfare funds involved Bryant, White made his arrests the next day.
In response to the arrests, then-U.S. Attorney Mike Hurstâs office issued a release revealing that White had not included the FBI in his investigation, despite the scheme involving federal funds. White, a Republican, had previously worked on Bryantâs gubernatorial campaign and was appointed to his position by Bryant to fill a vacancy. White explained that he went to the Hinds County District Attorneyâs Office, run by a Democrat, to avoid the appearance of political influence and for the ability to act quickly compared to the federal authorities.
But the arrests also resulted in another thing: Bryant ending talks with the company at the center of the scandal, texts show.
When news broke of the arrests, Bryant texted Vanlandingham to ask about the charges. The scientist told the former governor heâd been subpoenaed and âjust gave them everything.â
âNot goodâŠâ Bryant wrote.
Five days later, White visited the local FBI offices to turn over his investigative file. Within hours, he also publicly named Bryant as the whistleblower of the case. To explain, White said that Bryant had relayed the initial intel about suspected fraud â the small tip regarding Davis and the wrestlers â in mid-2019.
The same morning, Bryant texted Vanlandingham, âI was unaware your company had ever received any TANIF funds. If some received anything of benefit personally then Legal issues certainly exists. I can have no further contact with your company. It is unfortunate to find ourselves at this point . I was hoping we could have somehow helped those who suffer from Brain Injuries. This has put that that hope on the sidelines.â
Whiteâs office retrieved this and other texts from Vanlandinghamâs phone after executing a search warrant on his Florida home on Feb. 19, 2020.
Defense attorneys for the News wouldnât see these texts, according to the latest lawsuit, until Mississippi Today published them more than two years later.