FRONT ROYAL – The Front Royal-Warren County Economic Development Authority and its former executive director Jennifer McDonald are disputing what documents should be presented in the authority’s $17.6 million embezzlement and misappropriation civil case against her and eight other defendants.
The EDA’s attorneys recently filed a motion in circuit court asking that McDonald, along with MoveOn8 and DaBoyz — two limited liability companies she owned — to turn over a number of documents.
One of the many allegations in the civil suit is that McDonald, who is being held without bond on counts of embezzlement and obtaining money by false pretenses, and former Sheriff Daniel McEathron, who died from an apparent suicide in May, used those companies to make personal land purchases with the authority’s money.
Attorney Lee Byrd, who is representing the EDA in the civil case, states that McDonald and the companies were ordered to provide certain documents and “although no Order of the Court excused them from responding, they refused to do so.”
He adds that McDonald’s lawyers then filed a motion to stay the discovery, which was overruled.
Byrd states that McDonald’s lawyers went on to file another motion to stay discovery, citing that McDonald and the companies have the right not to incriminate themselves.
He adds that she and the companies “are not entitled to a blanket Fifth Amendment right to refuse to answer questions and produce documents in this noncriminal proceeding.”
Regarding the LLCs, Byrd states that corporations cannot claim the Fifth Amendment because that “would be tantamount to a claim of privilege by the corporation, which of course possess no such privilege.”
While the EDA’s attorneys attempt to obtain documents from McDonald, her lawyers have filed a motion for the EDA to turn over its insurance policies.
Byrd states that request should be denied because there is no reason such policies “are or should be admissible in evidence.”
“Nor can there be any basis to believe that Warren EDA’s insurance policies are the sort of documents that might lead to the discovery of admissible evidence,” he states.
Byrd adds that McDonald “defrauded” the EDA and conspired with others for personal enrichment among other alleged fraudulent activity.
“None of these claims are proven more or less likely by the Warren EDA’s insurance policies,” he states.
Byrd adds that McDonald would like to use the insurance policy “for her personal aggrandizement” to say she “may be the beneficiary of an insurance policy that protects against thievery.”
“Given her lengthy, unabated, and unrepentant history of defrauding the EDA, the prospect of providing to her documents that she might employ to further make fraudulent claims...is undesirable, to say the least,” he states.
Jay McDannell, McDonald’s lawyer, states in a court filing that “it is possible, if not likely, that she enjoys the benefits of sovereign immunity” for some of the allegations levied against her.
“The existence of such coverage may be extremely relevant to McDonald’s ability to mount a defense to the instant action and related actions and may also shed light on the sovereign immunity issues that will inevitably be before this Court,” he states.
McDannell adds that delaying the “gamesmanship interposed by the EDA” regarding the issue “is simply inexcusable.”
“McDonald has exhausted her personal finances and leaned on family to help her finance her defense of criminal and civil charges by the EDA that are, at a minimum, facially over-blown and out-of-proportion,” he states.
McDannell adds that if there are no insurance policies that are applicable, the EDA should produce the documents and prove that they do not exist.
Even if the motion to get the request for insurance policies is thrown out, McDonald’s lawyers will nonetheless receive them. Dan Whitten, county and EDA attorney, said that her lawyers filed a Freedom of Information Act request seeking the insurance policies, which will be approved and turned over today.
He said that “sometimes discovery is different than FOIA” because in court a document has to be relevant. When responding to a FOIA, however, he said a request must simply be compliant with the law and “we don’t look at the relevancy.”
The EDA has also filed motions objecting to document requests from McDonald’s lawyer including all documents of communications to or from McDonald after 2014; documents provided to Cherry Bekaert, the firm hired to investigate the EDA’s finances; all communications related to allegations in the civil complaint; documents supporting the complaint’s allegations; communications between EDA board members and staff after 2014; and more.
Cullen Seltzer, who is also representing the EDA, states in a motion that the EDA cannot be certain that the documents it did turn over “were not forged or altered.”