FRONT ROYAL – The Front Royal-Warren County Economic Development Authority’s lawyers are backing off previous claims that ITFederal developer Curt Tran was involved in improper activities regarding a now-canceled criminal justice training academy.
In March, the EDA filed a $17.6 million civil lawsuit against nine individuals including former EDA Executive Director Jennifer McDonald, the now-deceased former Warren County Sheriff Daniel McEathron and Tran.
One of the many alleged embezzlement schemes the lawsuit outlined was the training academy, which was described as “an artifice orchestrated to divert Warren EDA funds to personally benefit” McDonald, McEathron and Tran.
Last week, the EDA filed an amended lawsuit that states the training academy was “an artifice orchestrated to divert Warren EDA funds to personally benefit” just McEathron and McDonald.
New allegations in the amended complaint include that McDonald “forged documents purporting to bear Defendant Tran’s signature and purporting to memorialize Defendant Tran’s agreement to participate” in the academy.
While the amended complaint provides new evidence that appears to clear Tran of wrongdoing in the criminal justice academy project, he remains a defendant in the lawsuit for his alleged role in other schemes involving ITFederal.
McEathron was dropped from the lawsuit after he committed suicide in May.
Plans for the training facility, detailed as a project to be funded through an unidentified private investor, were announced in March 2016.
A financial report by Cherry Bekaert – the firm hired to investigate the EDA’s finances – states that former EDA board members Greg Drescher and Bruce Drummond and former EDA Attorney Dan Whitten all confirmed that McDonald said Tran was the investor.
The amended lawsuit states that Tran denies ever participating in the training academy “in any manner, including denying ever having agreed to make any financial contribution.”
The Cherry Bekaert report also outlines text messages between former EDA board member Ron Llewellyn, EDA board member Gray Blanton and Tran.
In that exchange, Llewellyn stated: “Jennifer said before she left that she had given you a balance still owed for work done toward the Academy. It is my understanding that the EDA has paid these bills and would like to be reimbursed. If I remember correctly, she indicated that the number was around $300,000.”
Tran responded: “What is the Academy we are talking about?”
Llewellyn responded: “The shooting facility for the police and Sheriff training.”
Tran responded: “Sorry, we are not involved in the Academy project. Is there some mix-up on this?”
In March, a Northern Virginia Daily Freedom of Information Act request seeking a contract between the private investor and the EDA was unsuccessful because it could not be found or did not exist. The Cherry Bekaert report states that during a Dec. 6 interview, McDonald said: “there was no formal written agreement in place.”
During that same interview, the report states, McDonald admitted using town and county funds to pay for the academy but said Tran would repay that money.
A Jan. 8, 2015, letter from McDonald and McEathron to Tran states that the EDA and Sheriff’s Office “would like to thank you first for the installment of Four Million Dollars” into a United Bank account in the EDA’s name and that a “remaining balance” of $4 million will be credited to the same account once the academy’s construction begins.
The letter –- which the Cherry Bekaert report states was found in the EDA’s office – appears to be signed by both McDonald and McEathron.
According to the Cherry Bekaert report, former EDA interim Executive Director John Anzivino and two part-time accountants could not find evidence showing $4 million was deposited into the authority’s United Bank accounts.
According to the Cherry Bekaert report, DaBoyz LLC was a company owned and operated by McDonald and McEathron that used embezzled EDA money to make multi-million dollar personal land purchases.
To illustrate their involvement in DaBoyz, the Cherry Bekaert report cites myriad bank documentation and checks signed by McDonald and McEathron.
Also noted in the report is a letter McDonald scanned into her personal email account with what appears to be McEathron’s signature. That letter states: “I, Daniel T. McEathron, agree that I was never a voting or participating member in DaBoyz, LLC. I also agree that I am currently not a member of the LLC, nor do I have any reason to believe I will ever become a member of the LLC. I have no interest, previously, currently, or in the future of DaBoyz, LLC which is owned by Jennifer R. McDonald.” The letter is dated Sept. 18, 2018, which was one week after Cherry Bekaert was hired to perform a forensic audit of the EDA’s finances.
The Cherry Bekaert report details a Nov. 1, 2016, check written from DaBoyz to the EDA with a memo line stating “for academy funds.” The check appears to contain McEathron’s signature.
The Cherry Bekaert report states that during an interview, “McDonald was adamant that Tran would repay the monies spent and then went on to state that Tran had already repaid $200,000.”
According to previous reports, when asked if he provided $200,000 for the training academy, Tran said: “That’s the first I’ve heard of that.” He also said that while the idea of him investing in the academy was discussed, the deal was never finalized and he made no payments.
In court filings, there is a letter without a date that appears to be from Tran to McDonald titled “Regional Training Academy and Firing Range.” The EDA’s lawsuit states this and other letters purported to be from Tran were forged. The undated letter states that the project went over its estimated $8 million budget by $61,000.
“I am willing to give the extra funds to complete this project to a satisfactory level, but I want to be assured that the contingency line items will be used only for necessity and not for frivolous items such as upgrades to the existing plans,” the letter states.
The Cherry Bekaert report states that when McDonald was pressed to show “formal documentation” listing Tran as the director, “she did not refer to the letters or subsequently produce them...to substantiate her claim before her resignation.”