FRONT ROYAL - The Board of Supervisors has approved an additional allocation of up to $600,000 to assist in the ongoing investigation and litigation regarding the alleged embezzlement of money they contributed to the Front Royal-Warren County Economic Development Authority.
The board at its regular Tuesday meeting approved additional spending of up to $300,000 for Cherry Bekaert LLP, the firm conducting a forensic audit into the EDA’s finances. The board approved a further allocation of up to $300,000 to the Sands Anderson law firm, which is representing the EDA on legal matters stemming from the audit findings. The vote was taken after the supervisors came out of an hour-plus long closed session.
Sands Anderson filed a $17 million civil lawsuit last week on behalf of the EDA against nine defendants for a series of financial improprieties based on the findings of the audit.
County and EDA Attorney Dan Whitten said over the phone that money spent so far includes $150,000 that was given to Cherry Bekaert and $100,000 that was given to Sands Anderson.
All of the payments were made by the county on behalf of the EDA.
EDA Chairman Gray Blanton has said the EDA would make its best effort to repay the county for these expenditures.
The amount of money each firm may be paid has steadily risen throughout the year.
The county in December approved after coming out of a closed session a $90,000 expenditure to pay for work rendered from Cherry Bekaert for three months of work. In February, the county approved an additional $60,000 be given to the firm.
In January, the county approved after coming out of closed session a $50,000 cap that may be provided to the Sands Anderson law firm for services representing the EDA. In February, that cap was increased to $100,000.
The county has also entered into a contract with lawyer Robert T. Mitchell at a rate of $275 per hour to represent the county on matters relating to the EDA in the event of any conflicts of interest that would prevent Whitten from performing his normal role with the agency.
Whitten said while the investigation into the EDA’s finances is about done, he does not know how much of the appropriated funds will be awarded to the two firms. He said a lot depends on how long the matter takes to proceed through court.
The motion to provide the two firms more funding was unanimous. It comes after Supervisors Tom Sayre and Archie Fox previously said they would not approve more funding unless they were made aware of the firms' activities.They both said after the meeting that they are satisfied with recent revelations regarding the EDA and the direction in which the authority is heading.