OPINION: Pig in a Poke?

“Pig in a Poke” is an old saying with a possibly fresh application in Warren County. The involvement of our local government/EDA in a little-known cattle feedlot scheme is a bizarre twist to the still unraveling $17-1/2 million dollar county embezzlement scandal.

Truc “Curt” Tran became an instant superhero in Warren County when he proposed his IT Federal LLC/Royal-Phoenix Trading LLC business on the old Avtex superfund site, but he also had a suitcase full of other dreams and LLCs. Surely encouraged by the red carpet treatment given by EDA, he hatched another plan, “Front Royal Farms, LLC” (a subsidiary of his VDN Systems, Inc.).

Recently posted EDA documents on the public Facebook blog, “One Mad Mother”, show this was to be a 1,000 acre beef cattle operation, coupled with an $8 million dollar worker training facility, and purchase, with expansion, of a local slaughterhouse. The trick was that others were going to buy and build this using no money from himself. The training facility would be used to train agricultural labor to run the cattle operation and to train workers in other professions, like baristas. Part of the complex would be a firing range. His plan was to process the meat using a local slaughterhouse and ship it by train, via the Inland Port, to Asian countries.

Tran’s secret proposal for the project showed $9 million coming from the county, $2 million from the state, $800,000 coming from the federal government, and a whopping $30 million coming from EB-5 investors, those being foreigners willing to invest their way into U. S. residency through the EB-5 program.

Tran was after land for his cattle feedlots. He approached one farmer in the Rockland area of Warren County to sell but was turned down. Tran said that none of the money for this project would be coming out of his own pocket. The same farmer was later approached by county officials to sell the farm for a training facility, but they were turned away, too.

Tran was counting on $30 million dollars from EB-5 investors. That would have required thirty EB-5 investors (foreigners, in probability, a majority of Chinese), putting in the required $1 million dollars each (incidentally, it is illegal for Chinese people to make this level of investment in a foreign county, but they find ways around it).

Run this scheme by a farmer if you don’t think it sounds crazy.

Documents show Tran was counting on funneling the EB-5 investors through his newly created “American Commonwealth Regional Center LLC”, which would have performed like a money corral. In exchange for $1 million, each foreign investor would be given a stake in the Front Royal Farms LLC. This EB-5 “regional center” was at one time registered by the US Customs and Immigration Service (USCIS), but we note that its status was revoked on 10 May 2019.

How Tran’s interest in farmland and a training center possibly connects with then-EDA director Jennifer McDonald and then-Sheriff McEathrons’ controversial land purchases, using non-Tran LLC’s, namely, “DaBoyz, LLC” and “MoveOn8, LLC”, remains unclear. Also unclear is whether this proposed agricultural training facility was related to the failed EDA/Tran police training academy project at the Happy Creek Industrial Park.

A local attorney was used as the original registered agent for MoveOn8 LLC. That may mean no more than he agreed to be the mail address for it, but who drafted the LLC operating documents, and who paid for them? Should these operating agreements be made public?

Our local officials have clammed-up because of the ongoing legal proceedings, and according to the chairman of the Board of Supervisors, some have signed confidentiality agreements. Some have already been called before a grand jury. Does silence sometimes sound better than excuses?

How did Tran expect $9 million from the county for this project? Those taxpayers presently being wrung-out for the recently passed 6-1/2 cent county tax increase, these being the same folks already swindled for $17.5 million dollars, might have minor curiosity.

Was Tran getting $30 million from EB-5 investors a pipe dream? Was he just a fellow with big ideas? How hard had he thought this through? Was this plan like a lottery jackpot, so big—job numbers and money invested—that Warren County would find it irresistible? In the Avtex/ IT Federal deal, Tran’s plan looked so good that Front Royal officials fell all over themselves to rush him a 10 million dollar loan at the get-go. When Tran scaled back his plans, he and local officials shifted blame, not surprisingly, to those who had questioned it, like then-Front Royal councilwoman Egger.

Who was planning to make Warren county’s taxpayers unwilling investors in such an insane high-risk investment? Gamblers like McDonald, who at the time, bragged about her slot machine winnings for a local newspaper article?

At some point, the Front Royal Farms project fizzled-out, the LLC currently showing as “canceled”, but the website for it is still up, showing a business address on Happy Creek Road.

Nationally, EB-5 programs are notorious for fraud and failure. On one end, foreign EB-5 investors can lose their money; on the other end, localities can lose their grants and incentives.

Three federal agencies conduct EB-5 fraud investigations: the SEC (Security Exchange Commission), the USCIS, and the Department of Labor. The SEC even has whistle-blower awards to expose EB-5 fraud.

Tran was able to get the Virginia Employment Commission to certify his Avtex IT Federal location would be eligible for the lower cost $500,000 per investor version of EB-5, based on unemployment statistics. He included a Virginia state certifying letter on his website. Assuming the document is legitimate, how was the VEC able to derive an unemployment number of 10% for a census area in Front Royal when the county average was around 4-5% at the time of the calculation? Tran needed an 8% figure to offer his investors this “Dollar Menu” version of the EB-5 for the Avtex project.

Former US Rep. Goodlatte was one of the main players in Congressional EB-5 legislation in this time-frame. He was also the one who brought Tran into Warren County. E-mails show aides were applying pressure on the USCIS to expedite Tran’s EB-5 regional center, and also to get it passed by the USCIS Administrative Appeals Office (suggesting that it was rejected initially). Tran was on a first name basis with these folks. In a recently released police video, Ron Llewellyn, a former EDA board member, said Goodlatte, or someone in his office, felt “harassed” by questions on the IT Federal project submitted to them by a local radio station reporter, Norma Jean Shaw: “Goodlatte called us and said, you gotta resolve this, so Jennifer [McDonald] notified the radio station owner and he fired her… in reality, she was probably let go for that reason”. It is ironic that Goodlatte, an expert on the EB-5, should have his own EB-5 project go awry.

During his last days in Congress, Goodlatte tried to keep the EB-5 program alive. Some experts have called for its elimination, however. In the article, “The EB-5 Program Is Legally Defective and has become a Scam”, 2018, attorney Douglas Litowitz predicted, “The EB-5 program will not end well.  It cannot be ‘fixed’.  It is shot-through with fraud. The honest course is for the SEC to admit that the program has mutated into a scam, even in ‘normal’ projects.”

Hope for some return of the money and land to the Warren County taxpayer might rest on whether Tran represented himself and his plans honestly. Tran lists numerous federal contract numbers on his website to indicate his business activities; it should be an easy matter to verify whether those contracts are legitimate. Current records at the Virginia Security Exchange Commission show he has four active LLC’s, four canceled LLC’s, and one active corporation.

John Thomson
Front Royal, Virginia