FRONT ROYAL - The town has filed a $3 million civil lawsuit against the Front Royal-Warren County Economic Development Authority and its former director Jennifer McDonald in attempts to recover overpayments the town made to the EDA.

In a complaint filed Friday in Circuit Court, Town Attorney Doug Napier states that in May 2018 the town learned it had been overbilled an unknown amount by the EDA for projects including the Front Royal Police Department’s headquarters, Leach Run Parkway and the West Main Street extension.

Three months after that revelation, Napier states that McDonald admitted during a meeting between EDA and town officials that she submitted false billing invoices and that the town’s auditor “rightfully and appropriately personally called out McDonald for committing fraud.”

After that meeting, Napier states that the town contacted the Virginia State Police regarding the situation and an investigation commenced that is ongoing to this day.

Napier states that those present at that meeting included then-EDA chairman Greg Drescher - who stepped down as chairman the next day - and EDA attorney Dan Whitten. Despite McDonald’s admission in the meeting, Napier states that the EDA board “inexplicably allowed McDonald to retain her position...with all of her right(s), privileges and duties as before.”

“As a direct and proximate result of the EDA’s and McDonald’s careless, negligent, grossly negligent, wanton, and reckless conduct toward the Town and the Town’s taxpayers, the Town and the Town’s taxpayers have suffered monetary losses, great loss to the Town’s and public’s reputation, will suffer great loss to the Town’s ability to attract new businesses, and will suffer great loss to the Town’s tax base for many years to come,” Napier states.

McDonald resigned from the EDA on December 20 and in March was named as one of eight defendants in a $17.6 million embezzlement and a misappropriation civil lawsuit filed by the EDA. She was arrested in May on felony counts of embezzlement and fraud and is being held without bond.

George Sonnett, assistant town attorney, said over the phone that while the exact figure owed is unknown, the $3 million cited in the lawsuit is a “good faith estimate based on what we know.” He added that amount may be amended if more facts come to light regarding the situation.

Napier states the town is owed “at least hundreds of thousands of dollars" and that the town “diligently sought” to learn exactly how much it overpaid through multiple Freedom of Information Act requests.

While McDonald was still employed at the EDA, Napier states the authority responded to the FOIA requests “with false, non-original, or non-responsive documents, apparently furnished from McDonald.” In 2019, Napier states that the EDA never “satisfactorily responded” to FOIA requests, likely because the authority does not know how much it owes the town or because it does not have money to pay back the town.

EDA Executive Director Doug Parsons said over the phone that, financially, the authority is currently “fine from an operational standpoint.” He added that the authority will hopefully recover money through its civil lawsuit and that the EDA could perhaps sell properties in the future to improve its “debt situation." As to how much debt the EDA has, Parsons said he does not know if that is a figure he can disclose as it is part of ongoing litigation but added that “we’re fine for now.”

Parsons said he has met with town officials and “we’ve been working with the town to identify what that figure is,” but he understands why the lawsuit was filed. He added that the lawsuit would “absolutely not” hinder the future working relationship between the EDA and town and "hopefully we can all get through this and start concentrating on the future."

“We want to get squared up with the town. We also want to continue working with them on economic development projects,” Parsons said.

Sonnett said that while any efforts “in getting to the bottom of this” by Parsons and the EDA board are appreciated, the town filed the lawsuit to protect its interests.

Napier states that by not having all of the necessary facts, it is uncertain when the statute of limitations may expire and prevent the recovery of money. Also, due to a lack of information, he states that the town does not know “the identities of all the persons or entities who might have been involved,” the location of the misappropriated funds or if they are recoverable.

– Contact Josh Gully at