FRONT ROYAL - Jennifer McDonald, former Front Royal-Warren County Economic Development Authority executive director, is suspected of embezzling $110,000 from town and county credit lines by falsifying documents for easements that were supposed to be free, according to a report by Cherry Bekaert, the firm that studied the EDA’s finances.
The charges are a small part of the $21 million of alleged embezzlement schemes Cherry Bekaert purports to have uncovered. Although the report states McDonald acted “possibly in collusion with other parties,” she remains the lone individual who has faced criminal charges. She is being held without bond on four felony counts of embezzlement.
Cherry Bekaert’s report states that McDonald, for construction of Leach Run Parkway, executed a series of contracts to purchase temporary land easements from various entities, including Leach Run Parkway and HEPTAD LLC, the latter of which former EDA board member Ron Llewellyn is the registered agent. The filing cites 12 other easements that McDonald allegedly doctored.
The court filing states that Yount Hyde & Barbour, the EDA’s auditing firm, received different deeds for the easement purchases than those that Cherry Bekaert examined.
On one set of deeds, the filing states that the easements were given away for free by Warren Memorial Hospital and HEPTAD. On the other set of deeds, which the filing states “appears to be altered,” a sale price of $55,000 is listed.
On both deeds for HEPTAD, Llewellyn’s signature appears. Also, on both deeds for Warren Memorial Hospital, chief financial officer Peter Gallagher’s signature appears.
Llewellyn said over the phone that “I never received $55,000 and neither did the hospital."
He said he knows HEPTAD did not receive any money associated with the easement and "I’ve spoken with someone at the hospital...and they indicated they never received any money for the easement,” he said.
Carol Weare, Valley Health's public relations manager, stated in an email that Valley Health "is unaware of any impropriety regarding our conveyance of land to build Leach Run Parkway." She stated that "we share the community's concern and will cooperate fully with the authorities looking into this matter."
She added that "those most closely involved are not available" and Valley Health "will need to dig a little."
Llewellyn said that he was told by EDA Attorney Dan Whitten that the $55,000 associated with the HEPTAD easement had been traced and “my assumption is if you follow the money," it would be easy to figure out where the money went.
Whitten is on vacation and could not confirm this.
Llewellyn added that when HEPTAD got the site plan for its land approved, the company offered the easement for free. He said that he does not remember seeing either one of the deeds.
“You’re talking about a long time ago. It doesn’t mean it didn’t happen. I just don’t remember seeing either one of them,” he said. “Frankly, I think it was fabricated. That’s my guess.”
Regarding what appears to be his signatures on both of the deeds, Llewellyn laughed and said: “That’s pretty neat.” He then pointed out a fabricated document was submitted as evidence in the civil case that held all of the EDA board members’ signatures.
“That never happened either...I think she’s gotten very good at copy and paste if you know what I mean,” he said.
On being the victim of fraud, Llewellyn said: “All of us are just shocked.”
“When you look back on what took place ... I am still not 100 percent sure what we could’ve done differently that would’ve been able to let us know what was going on,” he said.
He noted that McDonald always had explanations to questions, and “even up to the last day before she resigned, she was trying to convince us we were all wrong.”
Llewellyn added that the EDA had an accountant and auditor who told the board it was doing “a great job” and “you kind of count on” those two entities “to do their job.”
He added that he does not know how the board would have caught McDonald’s complicated schemes, especially considering that she fooled the EDA’s accountant.
“It’s a shame. I feel terrible for the community and I feel terrible for the people that are having to go through this. Hopefully, we’re going to come out stronger than we went in but it’s still painful to watch,” Llewellyn said.