Civil Case Jury finds April Petty liable for return of $125,000 to EDA

After a day-and-a-half of opening and closing arguments, witness testimony, and evidentiary exhibits being presented to them, a seven-person Warren County Circuit Court civil case jury found for the plaintiff “Warren Economic Development Authority” (EDA or legally FR-WC EDA) on 4 of 5 claims of financial liability against April Petty for the return of $125,000 to the EDA. Petty was accused of receiving the benefit of a $125,000 check written by former EDA Executive Director Jennifer McDonald from an EDA account to pay off the balance of Petty’s home mortgage loan with Ocwen loan company as part of a March 2016 sales process on Petty’s home.

McDonald was acting as Petty’s real estate sales agent in her side employment role with Campbell Realty while still EDA executive director. As noted in a previous story on the trial, McDonald is the central figure in the $21-million EDA financial scandal that erupted in 2018-2019, dating back as far as 2014. McDonald was called as a defense witness and answered some questions. However, questioned about her relationship with Petty or the sales process on Petty’s Howellsville Road home, she invoked her 5th Amendment right not to respond at risk of self-incrimination.

See: EDA versus April Petty civil liability trial heads into its second day

Defense counsel William Shmidheiser indicated he would file a motion with the court to “set aside” the verdict. After some discussion between Judge Bruce D. Albertson, Shmidheiser, and EDA attorney Cullen Seltzer, a schedule of three weeks to file that defense motion, with 14 days for the plaintiff to respond, and an additional 10 days for any further filings if necessary, was set.

But as to the verdict as it now stands, even though the check and alleged unauthorized transfer of EDA assets didn’t go directly to Petty, EDA counsel Seltzer cited five criteria by which Petty was liable for the return of what he stated EDA research indicated was an unauthorized transfer of EDA assets to Petty’s benefit. Those were: Unjust Enrichment, Conversion, Fraud, Conspiracy, and Ultra Vires, the latter a legal term regarding an official, in this case, McDonald, acting outside their legal authority without authorization from their controlling board. The jury found for the EDA on all but the Conspiracy claim.

EDA counsel Cullen Seltzer and legal assistant Kimberly Pautsrud leave the courthouse with the ‘paper trail’ of evidence they utilized to get a verdict of $125,000 liability against April Petty. The liability relates to an EDA check Jennifer McDonald cut to pay off a Petty mortgage loan as part of the March 2016 sale of Petty’s home. McDonald was Petty’s real estate agent in the transaction.

Plaintiff counsel Seltzer noted that the mortgage pay-down increased the value of Petty’s home sale from $210,000 which actually was paid by the buyers, to her desired asking price of $335,000, largely clearing her existing debt.

Defense counsel countered that Petty had no knowledge that the $125,000 mortgage payoff hadn’t come from the buyer, Richmond couple Christopher and Tasha Leary, as Petty said McDonald told her was the case at the time. Shmidheiser and Petty contended that as a result of the sale of her home, the defendant had not received the benefit of the alleged illicit transfer of EDA funds, but rather the buyers did.

However, plaintiff counsel Seltzer noted that rather than realize what she had feared might be as little as $500 she would see from the home sale that got only a few “low ball” offers over the first five-and-a-half months of the six-month sales contract with McDonald and Campbell Realty, Petty received a check for $41,934.73. And after four-and-a-quarter hours of deliberation Thursday afternoon, seven jurors agreed that was a benefit received by Petty from McDonald’s unauthorized transfer of EDA funds.

Other civil liability trials on the horizon this month are the EDA vs. Donald Poe and Earthright Energy; vs. Samuel North; vs. William Lambert; and vs. Truc “Curt” Tran and ITFederal.

See: EDA vs. April Petty: First in string of EDA civil case trials this month poised to start Wednesday