FRONT ROYAL – Nine defendants were named in a civil case filed Tuesday in the Circuit Court of Warren County by the Front Royal-Warren County Economic Development Authority for their alleged involvement in the misappropriation of $17,640,446.16 of the authority’s money.
Defendants named in the case filed by Richmond attorney Daniel M. Siegel, with the Sands Anderson firm, are former EDA Executive Director Jennifer McDonald, Warren County Sheriff Daniel McEathron, ITFederal principal Truc “Curt” Tran, ITFederal LLC, MoveOn8 LLC, DaBoyz LLC and Donald Poe and Justin Appleton, principals of Earth Right Energy Solar Commercial LLC.
The complaint states that McDonald, who worked at the EDA for nearly 20 years – 10 of them as executive director – “engaged in a variety of schemes to unlawfully take money from the Warren EDA for her personal benefit” from at least 2016 to 2018.
The filing states that “McDonald stole from the Warren EDA, misused its financial assets, deceived its leadership, withheld necessary information from the Warren EDA, misappropriated Warren EDA assets for her personal aggrandizement, and conducted a years-long campaign of deceit and exploitation.”
It further states that “Defendant McDonald enjoyed, and abused, an extraordinary position of trust. There was no part of the Warren EDA’s operations, records, or financial affairs with which she was not familiar.”
Defendants “engaged in a variety of schemes and artifice to unlawfully enrich themselves at the expense of the Warren EDA,” the filing states and involve the following projects:
- a. Work Force Housing – Royal Lane Property Embezzlements;
- b. Afton Inn Project Embezzlements;
- c. Criminal Justice Academy a/k/a Skyline Regional Training Academy;
- d. ITFederal Loan;
- e. Subsequent Payments to ITFederal;
- f. Unlawful Payments Concerning Earth Right Energy, LLC;
- g. Unlawful Payment of Town and Warren County Funds for Defendant McDonald Owned/Controlled Real Estate.
The filing states that McDonald has admitted to taking money from the Town of Front Royal and Warren County bank credits facilities for several purposes other than which they were intended. It notes that Defendant McDonald “often doctored and/or created false documents and then made or directed to be made false entries in the Warren EDA’s books and records to conceal the diverted monies.”
Moreover, the filing indicated that McDonald admitted via email on the day she resigned that she is liable for $2.7 million in EDA losses. According to the filing, she had agreed to pay that money back to the EDA by June 20, 2019 by either getting reimbursed by ITFederal, an unnamed private investor, and Earth Right Energy or pay it back herself. She did not specify if Sheriff McEathron was the unnamed investor, though the pair bought a number of properties together in excess of $2 million.
“The admission grossly undervalues the extent of her theft and unlawful distributions but is one indication of her consciousness of guilt in her conduct,” the filing notes.
The filing states that DaBoyz LLC, which was owned and operated by McDonald and Warren County Sheriff Daniel McEathron, purchased property at 2951 Rileyville Road in Page County for $554,427 through “credit facilities” belonging to the EDA.
According to the filing, on Sept. 14, 2016, the EDA wired $2 million to an account at First Bank and Trust to TLC Settlements LLC. That $2 million was subsequently paid to DaBoyz LLC. The filing says that DaBoyz LLC. then purchased several parcels of land.
The filing states that LLCs owned solely by McDonald or with McEathron “unlawfully diverted money” from the EDA through bank credit lines restricted for Front Royal and Warren County use.
The filing states that McDonald “authorized the wire transfer of money from a Warren EDA credit facility to the sellers of 1321 Happy Creek Road. The wire transfer was for $1,007,672.84.” That property, the filing states, was “conveyed” to Moveon8 LLC, another company owned and operated by McDonald and McEathron.
The filing states that McDonald fraudulently altered invoices for payments on the Afton Inn project, resulting in the embezzlement charge. McDonald doctored invoices for payments by United Bank that were supposedly used for the project. The filing states the invoices totaled over $50,000, though the project’s developer claimed those invoices were not submitted by the company.
The filing states that McDonald used that money to pay on her personal Sears credit card and Chase bank card accounts.
The filing also states that the Criminal Justice Training Academy a/k/a Skyline Regional Training Academy was “an artifice orchestrated to divert Warren EDA funds to personally benefit” McDonald, McEathron and Tran.
The filing further states that of the $10 million loan to ITFederal, “little to no proceeds” were applied to the ITFederal project. Instead, it says that McDonald and Tran “converted all or a portion of the proceeds of the ITFederal loan to their own personal benefit.”
Regarding the Earth Right Energy Solar Commercial LLC project that would have put solar panels on county schools, the filing states that McDonald directed over $1.2 million be given to Poe’s company using lines of credit established for Front Royal and Warren County. $841,904 was for the installation of equipment that was never performed, according to Tuesday’s filing.
The filing further states that defendants caused the EDA to make transactions for equipment or enter into agreements with Earth Right Energy LLC that were not approved by the EDA.
McDonald, McEathron, Tran nor Poe could be reached via telephone for comment; contact information for Appleton could not be found.
An EDA news release issued Tuesday afternoon states that the board, like the community was “shocked by the breadth of these allegations.”
It went on to say that the board was “disappointed that these transactions didn’t come to our attention earlier through regularly scheduled annual audits, we commit to doing everything we can to ensure this does not happen again. We recognize that this board must regain the public’s trust while seeking to recover pubic funds and holding those responsible accountable for their actions.”
Under the leadership of interim executive director John Anzivino, the board stated in the release that it had “put into place new policies ranging from expense approvals to screening of employees. We’ve reinstated a loan committee and appointed a budget committee for additional oversight while expanding the scope of the audit committee. We’re also seeking more engagement of current board members and their understanding of the responsibilities and oversight duties of this unpaid, volunteer role as well as new members with new ideas and different perspectives.”
The EDA board and the Warren County Board of Supervisors have begun discussions to make the County the fiscal agent for the EDA effective July 1, 2019 the release stated, which would bring all financial transactions under the watch of Acting Warren County Treasurer Jamie Spiker, which would, the release stated, “provide additional layers of oversight, protection and accountability so we can focus on what we do best – growing our region’s economy.”
The release further stated, “While we’re taking important steps now to safeguard our future, let us not lose sight of the many accomplishments of the EDA in recent years showing our significant role in our community’s economic development. Such accomplishments include the growth in the expansion of existing industries as well as the ongoing development of two industrial parks, one former Superfund site and a technology park.”
Since the mid-1990s, the EDA says it has helped create over 2,500 jobs and $500 million in investment in Warren County and the Town of Front Royal.
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