A jury on Thursday found that a Warren County woman defrauded a local government agency in 2016 by using its ill-gotten money in the sale of her house.

The Front Royal-Warren County Economic Development Authority claimed in a 2019 lawsuit that April D. Petty benefited from a scheme perpetrated by its former executive director Jennifer R. McDonald, who used EDA money without the permission of its board of directors.

The jury found in favor of the EDA. Specifically, the jury found Petty liable on four of five claims against her: that she defrauded the EDA out of $125,000; that she committed conversion with the authority property (similar to theft in criminal cases); and that she was unjustly enriched by the $125,000.

Judge Bruce D. Albertson, who presided over the case, withheld judgment to give the defense —about three weeks — to file its motion to set aside the jury’s verdict.

The plaintiff claimed McDonald spent $125,000 of EDA money to pay down the mortgage on Petty’s home at 186 Howellsville Road, Front Royal. EDA attorney Cullen D. Seltzer claimed that Petty knew the $125,000 came from the authority. The plaintiff contended that Petty knew about McDonald’s plan to use the authority money in the effort to sell her house. Petty refused to pay back the $125,000.

Petty’s attorney, William E. Shmidheiser III, argued that his client did not know the money came from McDonald or the EDA. Shmidheiser portrayed his client as an unwitting patsy in McDonald’s alleged schemes.

McDonald testified for the defense on the second day of the trial. McDonald exercised her right under the Fifth Amendment of the U.S. Constitution — protection against self-incrimination — in response to any question asked of her related to the sale of Petty’s property and her role as a real estate agent for Century 21 Campbell Realty in Front Royal.

The jury found that the plaintiff did not prove that Petty conspired with others to defraud the EDA of its money. The seven jurors deliberated for about four hours and 40 minutes before they reached their unanimous verdict on the third day of the trial.

Petty is one of a handful of defendants named in the EDA’s $63 million lawsuit against McDonald who they claim stole more than $20 million of authority funds to perpetuate real estate schemes. McDonald has since been dismissed from the lawsuit by way of an agreement reached with the EDA that requires her to pay the EDA $9 million. McDonald does not admit wrongdoing under the agreement.

McDonald has not been convicted of any crimes related to the embezzlement claims. McDonald is charged in federal court on counts of money laundering, fraud and identity theft and faces a trial next year.

– Contact Alex Bridges at abridges@nvdaily.com

(1) comment

Darrin Gifft

Similar to theft in a criminal court but no criminal charges locally, I guess if they’d charge one they’d have to charge them all and that ain’t going to happen.

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