FRONT ROYAL — Jennifer McDonald, the former Front Royal-Warren County Economic Development Authority executive director, was denied bond Tuesday by Warren County Circuit Court Judge Clifford L. Athey.

The bond hearing came after McDonald was arrested Friday on two felony counts of fraud and two felony counts of embezzlement.

A special grand jury that is investigating potential misfeasance and malfeasance in the EDA, the town, the county, the schools and the Warren County Sheriff’s Office handed up indictments against McDonald on Friday.

According to the indictments, McDonald “wrongfully and fraudulently” used EDA funds between May 27, 2018, and July 3, 2018, and “unlawfully and feloniously” obtained money from the EDA between June 11 and June 19, 2018.

A news release from Virginia State Police Public Information Officer Brent Coffey states that the charges stem from a state police investigation that was initiated in August 2018. He states the investigation, which is ongoing, relates to McDonald’s misuse of funds between 2014 and 2018. The FBI was also seen in April removing boxes from the EDA’s Kendrick Lane office.

The charges came after the special grand jury on Wednesday, Thursday and Friday of last week interviewed several individuals associated with the case.

Athey noted that his understanding is that the indictments are based on “credit card transactions.”

On March 26, the EDA filed a $17.6 million civil lawsuit alleging embezzlement and misappropriation of funds by nine defendants including McDonald. The only mention of credit card transactions in that lawsuit is an accusation that McDonald doctored invoices related to the Afton Inn renovation project last summer.

Peter Greenspun, McDonald’s attorney, said that his client should be granted bond because she is “well tied” to the community, owns a house here and all of her family lives here, which ensures she will not flee. He added that she is fully employed by Earth Right Energy — a company that is one of the nine defendants in the civil lawsuit.

If granted bond, Greenspun said that McDonald would turn over her passport.

Greenspun added that McDonald should be released because she is not a danger to herself or the public. He added that McDonald has a “cardiac history” that existed before the charges and she was taken to the hospital while being held over the weekend stemming from health issues. He noted these conditions were of concern before the arrest, as McDonald previously had a “stress test” appointment scheduled for Tuesday.

Assistant Commonwealth’s Attorney Bryan Layton requested that McDonald be held without bond, noting that it is “hard to say who she is based” on the alleged deception she carried out during a “systemic and comprehensive public fraud.”

He said that the chance of McDonald being a flight risk is likely to have increased since she was charged and that the commonwealth “is prepared to bear any costs” related to her health issues.

Greenspun responded that Layton’s argument is “we don’t think she is this nice person,” which is not enough to deny bond.

Athey said the context of the charges, which fall in the midst of the civil lawsuit and special grand jury proceedings, must be considered. He said that $17 million “is a lot of money” and if McDonald is in possession of 10 percent of those alleged stolen funds, she may be a flight risk.

While Athey said he does not believe she would pose a threat to herself or anyone else, he denied bond due to the possibility of her fleeing.

A discovery hearing is set for June 26 in Warren County Circuit Court.

– Contact Josh Gully at jgully@nvdaily.com