The workforce housing apartment complex that was supposed to be open by the 2018-19 school year was cited in the Front Royal-Warren County Economic Development Authority’s recent lawsuit as a way former EDA director Jennifer McDonald allegedly embezzled money from the authority.

The workforce housing project was announced in late 2015 with plans calling for a 36-unit apartment complex that would provide affordable rent to median-salaried citizens such as teachers and police officers.

Construction has still not commenced where the complex was supposed to be located -- at the dead-end of Royal Lane on 3.5 acres previously owned by Jeanette and Walter Campbell, McDonald’s aunt and uncle.

Case filings in the EDA’s lawsuit state that McDonald did not disclose her familial relations with the Campbells until April 2017. The filings add that McDonald never “timely disclosed” that she worked as a real estate agent for the Campbells' company, Century 21 Campbell Realty.

When McDonald did disclose the relationship, the filing states, she told the EDA board that she had no financial interest in the purchase.

According to previous reports, McDonald initially told EDA board members that the land was going to be donated to the authority by the Campbells.

The filing, however, notes that the land was eventually purchased for $577,511. According to previous reports, McDonald claimed that a deadline for the Campbells to receive a tax credit was not met and the property was returned to them by the EDA. The filing does not mention any such deadline.

In March 2016, the EDA board approved the $445,000 purchase of the property from the Campbells.

The filing states that McDonald told the board that the purchase would be refunded by an outside investor but she proceeded to use a United Bank credit line meant for the town and county to purchase the land. The filing states that McDonald admitted knowing that the credit line was reserved for the town and county.

The filing adds that even though the EDA approved a $445,000 purchase, McDonald directed the EDA to spend $577,511.

“McDonald engineered this additional payment through a forged sales contract for the purchase,” the filing states.

The filing states when the sale closed, the Campbells were “enriched by an additional $130,000” due to McDonald’s “deceit and misconduct.”

Jeanette Campbell said over the phone Thursday that “I have spoken to my attorney, we are private citizens that sold a piece of land that we owned for 11 years...let’s leave it at that.”

“Keep our name out of the paper,” she added and hung up the phone.

The filing states that when McDonald was confronted about the land being bought for more than the approved purchase price, she said that the $575,000 was the EDA’s “authorized purchase price."

According to previous reports, the EDA claimed to have been working with the Aikens Group since 2014 on the project. The reports state that the firm was not revealed until August 2017 because McDonald said the company did not want its name publicly revealed until all necessary permits were obtained.

The filing states that the EDA sold the property to Cornerstone L.P., an entity of the Aikens Group, in November 2018 for $10. An Aikens Group representative did not respond to a phone message.

The filing states that McDonald told the EDA board that the $125,000 spent over the EDA's approved purchase price was refunded by the Aikens Group and to prove this she provided a "redacted loan statement" from Ocwen Loan Servicing LLC that omitted the borrower's address and name. The filing states that it was later discovered that a $125,000 check was written from an EDA bank account to the Ocwen Loan Servicing LLC.

According to previous reports, then town councilwoman Bébhinn Egger Rowland in May 2017 raised a series of questions regarding what she thought was suspicious activity regarding the workforce housing deal.

As previously reported, when Egger Rowland asked the questions during a council meeting, Mayor Hollis Tharpe, who is McDonald’s second cousin, told Egger Rowland that the town had nothing to do with the project. She responded that the town approved a special-use permit for the EDA to build the project. Tharpe recently apologized to Egger Rowland for not taking her inquires more seriously.

The EDA responded to Egger Rowland's questions by releasing a packet with over 400 pages detailing the project. Egger Rowland responded at the time that answering her questions by releasing the packet was similar to paying a fine in pennies.

Attached to that packet was a letter in support of McDonald signed by then-EDA chairwoman Patricia Wines and vice chairman Greg Drescher, who also serves as the Warren County Public Schools’ superintendent.

Other EDA board members at the time were William Biggs, Ron Llewellyn, Bruce Drummond, Brendan Arbuckle and Jim Eastham.

The letter stated that any criticism directed at McDonald is “unfortunate and unwarranted.” It added that McDonald works under the board’s direction and “she is not permitted to make significant decisions without board approval and the EDA Board carefully vets every project undertaken.”

– Contact Josh Gully at