Nearly five years after officials first named his company in the “largest public embezzlement case in state history,” Florida neuroscientist Jacob Vanlandingham has pleaded guilty to one federal charge of wire fraud.
Vanlandingham is the latest defendant to admit to some role in the Mississippi welfare scandal, which ensnared his former business partner, retired NFL quarterback Brett Favre. The two worked together, a civil lawsuit by the Mississippi Department of Human Services alleges, to channel funds from the federal Temporary Assistance for Needy Families program to their pharmaceutical startup project called Prevacus.
But acquiring $1.9 million in federal welfare funds from the poorest state in the nation to develop a drug to treat concussions — an allegedly illegal apply of the funds — was not Vanlandingham’s crime. Instead, he pleaded guilty to using some of the funds for himself, including for “gambling and paying off personal debts,” according to a federal court file.
Reached Wednesday, Vanlandingham said he didn’t want his narrow guilty plea to be misconstrued as an admission of stealing welfare money.
“The case was very complicated but it really boiled down to one count of wire fraud, not any finding of welfare fraud,” said Vanlandingham’s Florida attorney Thomas Findley.
Both Favre and Vanlandingham have denied the allegations in the ongoing civil suit and Favre has not been charged with a crime. Vanlandingham founded Prevacus in 2012 and Favre was one of its largest investors and promoters. The startup is defunct today after selling the idea of its concussion drug to another company.
In January of 2019, Prevacus entered a $1.7 million contract with Mississippi Community Education Center, a nonprofit that the state welfare agency, Mississippi Department of Human Services, had entrusted to spend millions of federal grant funds.
“The purpose of the scheme … was for Vanlandingham to unlawfully enrich himself by making materially false and fraudulent representations that he would use certain funds, including funds obtained from MDHS through MCEC, to develop a pharmaceutical treatment for concussions,” reads the charge.
Vanlandingham pleaded guilty to a bill of information, a charging document that the government uses when a defendant agrees to waive a formal indictment, and was released on a $10,000 bond on Wednesday. The charge related to a $400,000 wire transfer from Mississippi Community Education Center to Prevacus on July 16, 2019, which occurred about a month after the state auditor’s investigation began.
The single count of wire fraud carries a maximum sentence of up to 20 years in prison and a fine of up to $250,000. Vanlandingham’s sentencing, along with the sentencings of six others who have pleaded guilty, has not been scheduled as each defendant continues to cooperate with federal investigators as part of their pleas.
The federal case against Vanlandingham stems from the government’s probe, beginning in 2020, into the misspending or theft of federal public assistance funds. The federal investigation did not begin until State Auditor Shad White, who originally investigated a tip brought forward by an agency employee to then-Gov. Phil Bryant, made six arrests and then turned the case over to federal authorities in February of 2020. Auditors have estimated between $77 million and $98 million was misspent or not properly documented.
“I applaud federal prosecutors for their continued work on this case,” White said in a press release Wednesday. “I’m grateful for my team at the Auditor’s office and the FBI for digging up the facts related to this case. We will continue to assist federal prosecutors as needed going forward.”
The welfare agency director John Davis and nonprofit founder Nancy New both pleaded guilty within the scheme in 2022 but have not been sentenced. An additional four defendants who pleaded to state or federal charges between 2020 and 2023. Each defendant has agreed to aid federal authorities in their ongoing investigation. The trial for an eighth defendant, former professional wrestler Ted “Teddy” DiBiase Jr., is scheduled for January.
The bill of information against Vanlandingham was signed by Todd Gee, the U.S. attorney in the Southern District of Mississippi who left the U.S. Department of Justice’s Public Integrity Section to fill the Jackson-based appointment.
But Vanlandingham’s bill of information was signed by two other senior officials from the U.S. Department of Justice — Glenn S. Leon, the chief of the DOJ’s Fraud Section, and Margaret A. Moeser, the chief of the DOJ’s Money Laundering and Asset Recovery Section — signaling Washington’s role in the ongoing investigation.
Many of the crimes associated with the welfare scandal come with a five year statute of limitations.
