Authorities from the State Auditor’s office arrested a Tunica man last week in what State Auditor Shad White said is the second largest demand letter for return of funds in the state’s history.
White said in a press conference in Oxford on Thursday that Mardis Jones was arrested and has been indicted for fraud and embezzlement for allegedly pocketing state and federal funds to repair impoverished homes.
“A $1,081,143.07 demand letter was issued to Jones upon his arrest,” said White. “This amount represents the second-largest demand in a criminal case in the history of the Auditor’s office and includes both interest and investigative expenses.”
White said their investigation uncovered $765,000 in funds allegedly embezzled and more than $750,000 in administration costs that has led to fraud charges.
Jones was Executive Director of Tunica County Housing Inc., (TCHI), a private organization responsible for operating a program to rehabilitate dilapidated homes owned by low-income county residents.
Under the program, funds came through Tunica County Board of Supervisors and were paid to TCHI, who then paid contractors to repair houses.
The county called for Jones to take applications from local homeowners and connect them with contractors for home repairs. Jones then submitted funding requests to the Board of Supervisors to pay the contractors.
White said instead of making all the required payments to the contractors, Jones is accused of embezzling from the program.
Investigators determined less than 20-percent of the nearly $2 million transferred to TCHI was actually paid to contractors for rehabilitation work on homes. Jones allegedly embezzled over $750,000 from the program.
White also said Thursday they do not expect any more arrests at this time.
“Mr. Jones acted as president, secretary and treasurer of this organization,” said White. “Yes, there should have been more oversight and monitoring of this program. The saddest part is people who qualified and others who might have badly needed home repairs never got them while Mr. Jones got rich at the expense of good government and all taxpayers.”
The auditor’s office began an investigation when a complaint was submitted by the Joint Legislative Committee on Performance Evaluation and Expenditure Review (PEER). White said newspaper reports also caught the Audit Department’s attention.
“While this case is a good example of state government officials working together to uncover fraud and hold the perpetrator accountable, I can’t help but be discouraged when another program intended to help the poor is stolen from,” Jones said. “Once again, an arm of government trusted a private organization to run a government program, and a large percentage of the program’s spending was flat out stolen.”
Jones surrendered to Special Agents at the Tunica County Jail on Wednesday afternoon. His bond was set at $50,000 by the court.
If convicted, Jones faces up to 40 years in prison and $45,000 in fines. All persons arrested by the Mississippi Office of the State Auditor are presumed innocent until proven guilty in a court of law. The case will be prosecuted by the office of Attorney General Lynn Fitch.
White said the Audit Department decided to ask the Attorney General to prosecute this case since they have had difficulty in getting local district attorney’s to prosecute cases in this area.
“Anytime we have a case we initially start with the local district attorney, but we also use the Attorney General and federal prosecutors, too,” said White. “We see where there are cases still pending that we have submitted to the local district attorney. These cases have been pending for a couple of years and rather than fill up her docket, it was taken to the Attorney General and she said she was glad to prosecute it.”
Suspected fraud can be reported to the Auditor’s office online any time by going to www.osa.ms.gov and clicking the red button simply phoning 1-800-321-1275 during regular business hours.
Shad White was appointed 42nd State Auditor of Mississippi in July 2018 by then governor Phil Bryant and won election to the office after establishing a tough, no-nonsense reputation during his first year on the job.
Before becoming Auditor, White served as Director of the Mississippi Justice Institute, a conservative public interest law institute. He holds a certificate in forensic accounting and is a Certified Fraud Examiner. White has also practiced law in the private sector, served as a special prosecutor, and taught as an adjunct professor.
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