Unsealed State Police documents claim McDonald lied about gambling winnings

Unsealed documents related to a Virginia State Police investigation into the finances of former Front Royal-Warren County Economic Development Director Jennifer McDonald indicate that she lied about slot-machine gambling winnings at the Hollywood Casino in Charles Town, West Virginia.

The documents released on Tuesday, April 23, indicate that between 2014 and September 30, 2018, McDonald lost a total of $753,207.32 – “This figure includes winnings and losses for McDonald,” one page of the unsealed documents states.

“The Hollywood Casino records obtained by Court Order indicated information that was in direct conflict to what Jennifer McDonald has stated publicly,” VSP Special Agent Eric Deel reports in a nine-point affidavit filed in November 2018.

In January 2018, McDonald approached this reporter about doing a story about a recent slot machine jackpot she said she hit at Hollywood Casino. The unsealed VSP documentation summary references the consequent Royal Examiner article published February 8, 2018, citing, “public concerns over real estate investments that appear to be beyond her financial means”.

At the time McDonald told Royal Examiner that word of a recent jackpot she had hit was on social media and she wanted to get an accurate story out. In that Royal Examiner story McDonald claimed three years of slot machine winnings of between $500,000 and $800,000 each year, totaling about $2 million.

EDA Director Jennifer McDonald parlays casino winnings into real estate investments

The timing of McDonald’s report of years of winnings spending a minimal amount of her own money – between $1,000 and $3,000 along with comparable amounts of house money, she estimated – coincided with Royal Examiner Editor Norma Jean Shaw’s exploration of large amounts of cash McDonald was using in her private real estate business.

JACKPOT!! – McDonald said her favorite ‘Quick Hit’ dollar slot once paid off to the tune of a $75,000 jackpot.

McDonald and two real estate companies she owns, along with a partner in those businesses, Warren County Sheriff Daniel McEathron, are listed among nine defendants named in a civil litigation filed March 26 on behalf of the EDA. That civil suit seeks recovery of a minimum of $17.6 million in alleged misdirected or embezzled EDA assets.

Sheriff, ITFed principal Tran, Donnie Poe named with McDonald in EDA civil suit

McEathron, like Earth Right Energy Solar Commercial LLC principals Donnie Poe and Justin Appleton, has issued a statement denying knowledge of any financial improprieties in transactions related to McDonald business or contractual matters.

McDonald resigned the EDA executive directorship she had held for a decade on December 20, 2018, under increasing scrutiny by the EDA Board of Directors three months into an ongoing forensic audit of EDA finances over the past decade.

Other information gleaned from a quick perusal of the 152 pages of documentation released by the Warren County Circuit Court Clerk’s Office Tuesday morning also indicates VSP subpoenaing McDonald financial records at two bank branches with Strasburg addresses, United Bankshares, Inc at 120 Oxbow Drive and First Bank at 406 Borden Mowery Drive. Both bank record subpoenas date back to January 2, 2014.

Records sought included “all deposits, electronic fund transfer, wire transfers, automated clearing house (ACH), credit card transactions” and ‘supporting documentation for any transaction …”

The ongoing forensic audit of EDA finances and VSP investigation into Jennifer McDonald’s banking and gambling practices overlaps her tenure as Annual President of the Front Royal Rotary three years ago.

An affidavit notes that the Town of Front Royal asked VSP “to investigate fraudulent and misleading conduct and reporting by McDonald in reference to a debt service quarterly billing” to the town government. As result of an internal audit by Town Finance Director B. J. Wilson ordered by council to explore an internal loan, last August town officials approached McDonald and then EDA Board Chairman Greg Drescher about debt service overpayments. Perhaps coincidentally, Drescher resigned his board chairmanship the following day.

“Numerous explanations were given which were later shown to be false and incorrect,” the affidavit states. “When questioned further, McDonald personally provided an amortization schedule to support the bond. The incorrect principal amount, incorrect ending date and incorrect interest rate was shown. After a meeting held … on 8/23/18, McDonald stated 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 has been posted nor any bank borrowing to pay such payment. VDOT has confirmed that they had not demanded the bond.”

The affidavit adds that, “McDonald, as Executive Director, has offered to reimburse the Town of Front Royal tens of thousands of dollars for said discrepancies in billing. She has also asked for an audit that would be confidential and not made public” – Uh oh, too late for that.

While the commonwealth’s motion to unseal the documents notes it would do so after completion of “critical portions of the investigation” anticipated this spring, it adds that “media coverage of the issues in this investigation” has been “particularly dogged” and “comprehensive” rendering those concerns now “a moot point.”

Do we see a change of venue request coming from any potential prosecutions related to this investigation?