FRONT ROYAL – A judge on Friday put a hold on some assets owned by Jennifer McDonald, the former executive director of the Front Royal-Warren County Economic Development Authority now accused of embezzling from the agency since 2014.
Judge Clifford L. Athey Jr. granted a motion by an attorney representing the EDA to attach or seize real estate properties and certain bank accounts owned or held by McDonald or her limited liability companies. Athey stopped short of including in the seizure of real estate or personal property such as vehicles and accounts owned jointly by McDonald and any family members as identified in the petition. The judge ruled that the plaintiff had met the burden of proof to attach some assets but did not do so for others.
McDonald also stands accused of stealing from the EDA between 2014 and 2018 while she served as its paid director. The judge said he took into consideration that McDonald has criminal charges, in addition to her civil case, and that the court should not hinder her right to finance a defense.
A $17.6 million lawsuit filed by attorneys with the Richmond firm Sands Anderson names McDonald as a defendant along with Donald F. Poe, Justin Appleton, Earth Right Energy Solar Commercial Limited Liability Company, Truc “Curt” Tran, the late Warren County Sheriff Daniel T. McEathron, McDonald-owned entities DaBoyz LLC and MoveOn8 LLC, and Tran’s business ITFederal LLC.
Cullen D. Seltzer represents the plaintiff and argued in his motion that the plaintiff needs the court to attach assets owned by McDonald and others named as defendants in the motion to keep her from selling or otherwise disposing of the properties and bank accounts that could hurt any related creditors.
“I think there is abundant evidence of fraud and deceit in this case,” Seltzer said in his closing statements.
McDonald sold property “through concealment and deceit,” Seltzer went on to claim, citing land on Royal Lane considered for an EDA housing project. The price of the property went from “free” as purported by McDonald to $445,000 and ultimately sold to another entity for $10. McDonald also used $3.1 million in EDA funds to buy property she titled in her own name or that of a company she controlled, Seltzer said.
McDonald continued to conceal her actions even after accounting firm Cherry Bekaert began an audit of the EDA last year, Seltzer said. The attorney argued that McDonald’s actions show she likely would continue this behavior and could dispose of her assets.
Seltzer cited witnesses who testified that three documents entered into evidence were forged or fraudulent, included a purported resolution authorizing McDonald to spent up to $2.5 million in EDA funds on a farming operation proposed by Tran.
“She has incurred the trust, solicited the trust of her employers and she’s abused that trust for many years,” Seltzer said. “She has done it in ways that demonstrate a considerable amount of planned ... thinking, even a certain amount of complexity.”
Jay M. McDannell, of the Reston firm Berliklaw LLC, represents McDonald and entities she started DaBoyz LLC and MoveOn8 LLC. McDonnell filed a motion to quash the plaintiff’s request for pretrial seizure and attachment.
McDannell argued that not only had the plaintiff filed the motion prematurely before parties completed the discovery phase but that Seltzer also had not proven that the defendant disposed of, has disposed of or is disposing of her assets.
McDannell said he respectfully chose not to respond to “vitriolic attacks” made against his client during the hearing.
“They’ve said that she’s stolen money, that she’s embezzled,” McDannell said. “Today, it was shocking and pervasive fraud. ... Multiple forgeries to this court. Fake documents. Craven and stupid.
“Someday, we’ll know the truth about those types of allegations,” McDannell said. “We do not know them today, and the suggestion that we do really demonstrates what the problem is here: they put the cart before the horse, your honor. They have come here and misrepresented, overstated nearly every aspect of this complaint, and I think that’s obvious to the court by some of the questions you’ve asked.”
The hearing on the plaintiff’s motion lasted almost three days and included testimony from former EDA board Chairman L. Greg Drescher and former board members Ron Llewellyn, Bill Biggs, Bill Drummond and William Sealock, who is now a Front Royal Town councilman.
Former members all testified that they had placed their trust in McDonald to perform her duties. But some of the witnesses testified they started to question that trust last year as information came to light about certain proposed projects, spending by the EDA and explanations McDonald made when asked about them by board members. They also testified that the board’s oversight of McDonald’s and the EDA’s activities might have been too “relaxed.” Several of the former members testified that they had known McDonald for years as executive director.
Former members who testified all indicated they did not know until as recent as the hearing of some of the activities McDonald engaged in with other people and entities involving land and EDA money or loans.
At the end of the hearing Friday, Athey acknowledged the timing of the plaintiff’s petition comes early in the process of such a civil case, before determining where parties stand.
“So the court is put in a difficult position because they’re really hearing half a trial, is what they’re doing,” Athey said.