FRONT ROYAL – The Front Royal-Warren County Economic Development Authority’s legal counsel has issued seven subpoenas seeking documentation related to any financial transactions involving the nine defendants in the authority’s $17.6 embezzlement and misappropriation civil lawsuit.
The defendants in the lawsuit are former EDA executive director Jennifer McDonald and MoveOn8 and DaBoyz, two limited liability companies she is associated with; ITFederal developer Curt Tran and ITFederal LLC; former Sheriff Daniel McEathron; Donald Poe; Justin Appleton; and Earth Right Energy Solar-Commercial LLC.
The subpoenas were served to Christina Grady of TLC Settlements LLC; Lee Berlik, McDonald’s lawyer; Bank of America in Richmond; J. Campbell Realty Inc. and its owner Jeanette M. Campbell, who is McDonald’s aunt; Alan Omar of 2 East Main Street LLC; Royal Phoenix Trading LLC and ITFederal LLC; and Missy Henry, the EDA’s former administrative assistant.
TLC Settlements’ website states that the business is a “settlement company that can handle every aspect of your real estate settlement” and assists in “title insurance, escrow and closing services, title reporting and abstracting services.”
The EDA’s complaint states that in September 2016, $2 million was wired from an EDA account at First Bank and Trust to TLC Settlements. The complaint states that money was paid from TLC Settlements to McDonald “and/or” DaBoyz LLC, an action that benefited her and McEathron.
The complaint states that DaBoyz LLC then purchased two parcels of land off Buck Mountain Road for $1.9 million from William T. Vaught Jr. and Rappahawn Inc. Those two parcels were then sold back to Vaught and Rappahawn Inc. for a $1.3 million about a month later.
The complaint attached documents showing that TLC Settlements served as the title company when the EDA approved the $445,000 purchase of a 3.5-acre land parcel from Jeanette and Walter Campbell, McDonald’s aunt and uncle. That land was supposed to be used for a workforce housing development. That transaction was completed using credit lines reserved for the town and county, according to the complaint.
That land was purchased for a price over the amount approved by the EDA board, for $557,000. Although McDonald told the board that the purchase would be reimbursed by the Aikens Group, a Winchester-based construction company, the authority sold that land to a subsidy of the firm for $10.
Although there is no record of the $10 sale being approved, EDA Chairman Gray Blanton signed the deed of sale. Blanton previously said he only saw the last page of the contract and had no reason to mistrust McDonald at the time. The sale occurred Nov. 28, 2018, over two months after the authority commissioned a forensic audit into the activities of McDonald.
The EDA’s complaint also alleges Tran and McDonald used a majority of a $10 million loan supposedly granted to construct ITFederal offices for their personal use. The complaint further alleges that Tran, McDonald and McEathron conspired to personally benefit from a proposed criminal justice training academy.
The registered agent of Royal Phoenix Trading LLC is ITFederal LLC. Tran previously said that although ITFederal will not open in Front Royal, new plans for the building — which remains under construction over three years after a groundbreaking ceremony – are detailed in part on Royal Phoenix Trading LLC’s website.
Omar is the principal of 2 East Main Street LLC, the company renovating the Afton Inn. He is not mentioned in the lawsuit but the complaint states McDonald allegedly doctored invoices from the LLC to make over $50,000 of personal credit card payments.
According to previous reports, Henry resigned as the EDA’s administrative assistant on March 18. Blanton said the reason provided for her quitting was that she did not get along with John Anzivino, the EDA’s interim director who will leave the post May 10. She also is not mentioned in the complaint.
Filed in Warren County Circuit Court last week, the subpoenas ask all parties served for the same 12 items — financial records dating back to 2012 — including:
• Records related to payments to or from the defendants.
• Records related to checking, investment, savings, credit, loan, equity line, trust, brokerage, escrow or other financial accounts related to any the defendants such as “the source of any payment or receipt.”
• Records of “any payment, credit, property, cash, investment, loan or other transaction” related to the EDA.
• Records of payments made by the EDA “on behalf of, or for the benefit of” the defendants.
• Records “related to any defendant,” except those exempt due to attorney-client privilege.
• Records related to “gambling fees, costs, winnings, payments, losses, or gambling related financial transactions” pertaining to McDonald, DaBoyz LLC or MoveOn8 LLC.
• Records showing any interest defendants have in personal or real property.
• Records related to the “lease, purchase, or other property interest or transaction by any of the defendants.”
• Records related to gifts received by any defendant.
• Records related to any loans the defendants applied for or received.
• Records of any income earned or received by the defendants.
• Records of “the ownership, membership, management and/or purpose of any partnership, limited liability company, corporation, or other business entity related to any of the defendants.”