FRONT ROYAL — Costs to uncover and litigate the alleged embezzlement at the Front Royal-Warren County Economic Development Authority have risen to over $1.2 million.
After exiting a closed session Tuesday, the Board of Supervisors increased the cap on what it may have to pay Sands Anderson — the law firm representing the authority in litigation regarding the alleged embezzlement at the EDA — from $500,000 to $750,000.
The cap has steadily increased since January when the supervisors approved the reserving of up to $50,000 for Sands Anderson. At the time, EDA and County Attorney Dan Whitten explained that although he is the authority’s lawyer, he does not have time to represent the EDA in the matter.
About a month later, the county increased the cap on legal fees for Sands Anderson to $100,000. In April, the supervisors increased the cap to $300,000. In June, the cap was increased to $500,000.
Sands Anderson will be the firm litigating the EDA’s $17.6 million embezzlement and misappropriation civil lawsuit that was filed in March against former EDA executive director Jennifer McDonald and two of her limited liability companies; Earth Right Energy Solar-Commercial LLC and its owners Donald Poe and Justin Appleton; ITFederal LLC and its owner Curt Tran; and former Sheriff Daniel McEathron, who died in May from an apparent suicide.
The basis of the lawsuit was a report by the firm Cherry Bekaert detailing a series of alleged embezzlement schemes related to EDA business. Whitten recently said that the county has paid Cherry Bekaert about $486,000 for the study and the EDA will likely not have the firm investigate any further.
With the $750,000 cap on legal fees and the $486,000 spent on the report, the county’s total potential expenses related to the EDA scandal are $1,236,000. The EDA has passed a resolution stating that it will make its best effort to pay back the county.
In February, the county also entered a contract with attorney Robert T. Mitchell, whose rate is $275 per hour, to represent the county in any EDA matters if a conflict of interest arises for Whitten. According to a county news release, Mitchell is an attorney at the Winchester-based Hall, Monahan, Engle, Mahan & Mitchell law firm and that he has decades of experience in local government law such as representing Clarke County.