FRONT ROYAL – Court documents state that Jennifer McDonald, the former Front Royal-Warren County Economic Development Authority executive director, “is suspected” of embezzling $10,000 of town and county money to pay Berlik Law LLC, a firm bearing the name of the lawyer she hired to represent her in two lawsuits.

Court filings by Cherry Bekaert, the firm that investigated the EDA’s finances, states that “on or about” Nov. 21, McDonald requested a $10,000 wire draw from First Bank and Trust with instructions “representing the $10,000 wire request was for the Afton Inn Attorney.”

The filing adds that McDonald “also attached an invoice with wiring instruction to send the payment to Berlik Law, LLC.”

Attorney Lee Berlik, of Berlik Law, was hired by McDonald to represent her in a civil defamation case and the firm has represented her in a $17.6 million embezzlement lawsuit filed by the EDA in which she is one of nine defendants.

Berlik did not respond to requests for a comment by press time.

In September, Warren County Supervisor Tom Sayre filed a civil defamation case against McDonald that centers around allegations McDonald attempted to frame Sayre for a June 2017 incident in which a rock was thrown through the front door of her house.

According to the Warren County General District Court website, the first hearing in the civil defamation case was on Nov. 16, five days before McDonald allegedly requested that the $10,000 wire transfer be sent to the law firm. This was just about one month before her Dec. 20 resignation from the EDA.

Five months after Sayre sued McDonald, she sued him for defamation in a case that also relates to the same rock-throwing incident.

McDonald's alleged statement that the $10,000 wire transfer was for an “Afton Inn Attorney” is one of a slew of accusations in the Cherry Bekaert filings centering around the Afton Inn Project.

The EDA received ownership of the Afton Inn – located at the corner of Main Street and Royal Avenue – in a 2014 property swap for the former town hall building.

According to previous reports, the EDA in April 2018 entered into an agreement with 2 E East Main Street LLC to renovate the derelict building.

The court filing states that the EDA was supposed to “obtain a renovation loan with monthly rent amounts paid by 2 East Main, LLC to equal the cost of debt service.” The filing states that there is no evidence that this funding was secured and that McDonald instead appears to have embezzled money from town and county “bank credit facilities.”

Under the original agreement, 2 East Main was supposed to begin paying rent this month to cover the debt service but the project has stalled as the EDA works on securing proper financing for the project.

Doug Parsons, EDA executive director, said over the phone Tuesday that he has reached out to the town and is trying to set a meeting to discuss how “to get the project going again.”

Parsons said that while “there’s a lot of moving parts,” he is “hoping we can structure a deal with the town, EDA and developers to get things going.”

He said that will include obtaining “a legitimate construction loan,” a goal on which he said the EDA has made “significant progress.”

“There’s room for optimism. It will just depend on what the town and developers are comfortable with,” Parsons said.

He added that since the EDA, town and developers have not yet met, he does not want to discuss the possible structure of any potential agreement.

Further embezzlements relating to the Afton Inn detailed in the court filings include allegations that McDonald altered $51,915 in invoices for the project to be paid off her personal Sears and Chase credit cards.

The EDA's civil lawsuit states three invoices from 2 East Main Street totaling $37,665 were doctored to state "make check directly payable to Sears."

The court documents include an email from McDonald to Missy Henry, former EDA administrative assistant, stating: "Second invoice. Please wait for wire. Make sure check is made to sears as indicated on their invoice."

– Contact Josh Gully at jgully@nvdaily.com