FRONT ROYAL – Jennifer McDonald, the former director of the Front Royal-Warren County Economic Development Authority, lost $753,207 gambling from 2014 to 2018, according to unsealed court documents relating to the Virginia State Police investigation into possible financial improprieties.
Virginia State Police, in conjunction with the Warren County Commonwealth’s Attorney Office, subpoenaed documents in September from the Hollywood Casino in Charles Town, West Virginia, detailing McDonald’s gambling records. This came seven months after McDonald told a local media outlet that she purchased various land parcels using about $1.9 million she had won at the casino from 2014 to 2018.
Virginia State Police Special Agent Eric Deel states in an affidavit that records provided by the casino show McDonald lost $753,207, with annual losses of $38,752 in 2014, $130,517 in 2015, $158,752 in 2016, $205,264 in 2017 and $219,920 in 2018. Interim EDA Director John Anzivino stated in an email that McDonald’s last budgeted salary was $115,000.
The situation is similar to the case of Byung “Peter” Bang, who served as Montgomery County, Maryland’s former Department of Economic Development director. According to the Washington Post, Bang pleaded guilty in November 2018 to federal counts including wire fraud and state charges including misconduct while in office. According to the Washington Post, it was Bang’s gambling habit that led to him embezzling $6.7 million of county money. In March, he was sentenced to 15 years in prison.
When McDonald resigned as director on Dec. 20, she sent the EDA board an email stating that she is liable for $2.7 million in EDA losses. Last month, the EDA filed a $17.6 million lawsuit against McDonald and nine other defendants detailing alleged embezzlement involving land dealings and misappropriation of town and county credit lines.
This month, a special grand jury was formed to investigate potential financial wrongdoings within the town, county, schools, EDA and the Warren County Sheriff’s Office.
In addition to casino records, state police have filed subpoenas for records from various banks and financial institutions throughout the country. Those include subpoenas for information on EDA bank accounts and details from financial institutions that Deel states keep financial records, “and could provide information on accounts McDonald could have opened or closed to hide embezzlement.”
Deel states in an affidavit that the Virginia State Police investigation began in August when the town relayed information of “fraudulent and misleading conduct and reporting by McDonald” for projects being financed through EDA debt service. He states that when the town received its quarterly billing for debt service projects, officials requested backup documentation.
“Upon being questioned, McDonald could not address individual components of the invoice nor the reasons for the amounts billed despite having control over these projects and billings,” Deel states.
He adds that “numerous explanations were given which were later shown to be false and incorrect.”
Deel states that major items the town questioned were charges relating to a $1.9 million cash performance bond “that was allegedly” posted with the Virginia Department of Transportation for construction of Leach Run Parkway. He states that McDonald told town officials that funds were borrowed to post the cash bond. He adds that McDonald later told officials that “the entire $1.9 million VDOT cash bond was an accounting error, a mistake, made by the EDA bookkeeper and that no such VDOT cash bond had been posted,” which VDOT has confirmed.
Assistant Commonwealth’s Attorney Brian Layton states in motions to unseal the documents that although the Virginia State Police investigation is ongoing, it “has proceeded past the initial stages where knowledge of their efforts might hinder the recovery of related evidence.” He adds that the media has comprehensively covered the matter and “prior concerns of undue influence over a potential jury” are “a moot point.” He states that the Commonwealth’s Attorney Office and the Virginia State Police agree that the documents should be unsealed for the public interest. Circuit Court Judge Clifford L. “Clay” Athey Jr. approved the request.