Defendant in Mississippi auditor's ‘second largest' embezzlement case in history goes free

Associated Press

5 hours ago

Four years ago, agents from the state auditor's office arrested Tunica nonprofit operator Mardis Jones in what the office trumpeted as the second-largest embezzlement case in its history and demanded Jones return over $1 million to the state.
The charges accused Jones of stealing $750,000 from a home rehabilitation program he was supposed to be administering while turning away needy rural residents living in crumbling houses.
But his defense attorney attacked holes in the case, and last month, a local jury found Jones not guilty of the criminal charges. Now, the state has made no indication it will bring a civil case to try to claw back the money from him.
Jones' nonprofit Tunica County Housing Inc. secured a subcontract with the county through the North Delta Regional Housing Authority in 2014 to run the county's home rehabilitation program funded with casino revenue. For his work, vetting applications and managing expenses, Jones earned $12,000 a month.
At the core of the criminal case were 'strange money transfers' and a finding that several of the people whose applications for home rehab were approved allegedly never received any repairs to their homes. According to the auditor's office, investigators found less than 20% of the nearly $2 million Jones' nonprofit received went to the contractors working to rehab homes.
'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,' State Auditor Shad White said in a press release after the arrest.
Attorney General Lynn Fitch echoed White, saying, 'These funds – hundreds of thousands of dollars – were meant to help the elderly, handicapped, and poverty stricken. But the funds never got to the vulnerable citizens who needed it most.'
Jones' lawyer Carlos Tanner explained to Mississippi Today that the program operated with an extreme backlog, and that 'some of the people they were claiming didn't get their houses done actually did' by the time the trial was held this year.
The program was poorly administered, Tanner said, meaning that even if a person's application was approved and a rehab contract prepared, county officials could direct Jones to put someone else's repair job ahead of his or hers.
'But just because it was run like a first weekend lemonade stand does not mean Mardis Jones stole money,' Tanner said.
Tanner said the investigators gathered paltry evidence, only looking at details that fit their narrative. While Jones did earn a large salary through his contract, Tanner said prosecutors never presented evidence that Jones converted money that was supposed to be used on home rehabilitation to his personal use.
Investigators got a warrant to seize Jones' electronics, Tanner said, but 'they never bothered to search it.'
'The two OSA (Office of the State Auditor) officials who were running the investigation, I questioned them about it during trial, and neither of them could tell me where the computer was, where the phone was, or what the contents were,' Tanner said.
Jacob Walters, a spokesperson for the auditor's office, defended the way the investigators handled the case, saying, 'The state auditor's office is never going to turn a case we investigated over to a prosecutor unless we're fully confident in the work that we did.'
At the time the auditor's office announced the Jones arrest, it also said it delivered a demand letter ordering Jones to repay over $1 million, the money it alleged he stole plus interest and investigative expenses.
It's up to the attorney general or local district attorney to decide how to prosecute auditor investigations, or in Jones' case, what happens to the civil demand now that a jury found him not guilty in the criminal case.
When a person receives a demand alongside his or her arrest, regardless of what happens with criminal charges, the claw back can be enforced through civil litigation — much like the case against several defendants in a stunning Mississippi Department of Human Services fraud case, which began in 2020 and has yet to be resolved. Walters said the demand against Jones is still the office's next-largest in history, second only to the welfare scandal.
The government might choose to pursue civil litigation, even if criminal prosecution is unsuccessful, because there is a lower burden of proof to win civil cases.
But the attorney general's office told Mississippi Today last month that it had not received the Jones demand letter from the auditor, meaning it has nothing left to enforce.
Walters said the auditor's office sent the letter along with the case file four years ago, but that with a turnover in attorneys prosecuting the case, the auditor had to resend the file last year. If the attorney general's office no longer possesses the demand document, Walters said, 'it's an incredibly easy problem to resolve.'
'Just reach out to us with a single phone call or email and we can get it to you,' Walters said.
After the interview, the auditor's office sent the demand letter by email, and the attorney general's office confirmed it was received.
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This story was originally published by Mississippi Today and distributed through a partnership with The Associated Press.