After nearly 6-1/2 hours of deliberation, at 7:30 p.m., a seven-person Warren County Circuit Court civil case jury ruled in favor of the “Warren Economic Development Authority” (EDA, WC EDA, FR-WC EDA) in its civil liability claim against Donald F. Poe and Earthright Energy Solar LLC (ERE). As noted in our related story on the fourth and final day’s closing arguments and jury deliberations, that was a five-pronged base claim for the return of $945,037 of EDA funds directed to Poe and the solar installation company he headed locally by former EDA Executive Director Jennifer McDonald. On each claim by the EDA against Poe and ERE: fraud, conversion, unjust enrichment, conspiracy, and ultra vires, the jury found in favor of the EDA.
However, according to information received at the courthouse following the verdict the total damages awarded surpassed that base claim as noted it could be in our related story. See:Jury gets EDA vs. Poe/Earthright Energy civil liability case at 1:10 p.m. Thursday afternoon
According to numbers received by Royal Examiner, the jury split the base claim between the two defendants, with Poe charged with $409,812 and ERE hit with $535,225 totaling the $945,037 base claim. Poe was also hit with $25,000 in conspiracy count damages and another $75,000 in punitive damages. In addition to its above compensatory amount, ERE was hit with $50,000 in conspiracy damages and $150,000 in punitive damages. The total award to the EDA is $1,245,037.
The EDA claimed the contracts and payments were illegally authorized by McDonald without the necessary EDA Board of Directors approval, despite some of those checks being co-signed by EDA board members. One of those members, Greg Drescher, testified that he signed one check after being told by McDonald that it was front money that would be returned to the EDA upon ERE achieving anticipated financing on a project the EDA board had been told by McDonald would be done for free in order for ERE to achieve desired tax credits.
Defense Counsel William Ashwell said he would provide additional information on any defense plans regarding possible appeal or other factors in coming days.
It was the EDA’s second civil case win this month. Last week April Petty was ordered to return $125,000 McDonald sent in EDA funds to pay off a mortgage debt on Petty’s home as part of Petty’s 2016 house sale process. McDonald was serving as Petty’s real estate agent in her second job with Campbell Realty, while still EDA executive director. See: Civil Case Jury finds April Petty liable for return of $125,000 to EDA
UPDATE 2: ‘Unexpected Circumstance’ Delays McDonald Federal Criminal Trial for rest of week
(Writer’s Update: On Wednesday, Sept. 20, for the second consecutive day the federal criminal trial of former FR-WC EDA Executive Director Jennifer McDonald was cancelled. This time there was no hearing to discuss reasons or other procedural matters as there was the previous day. One might guess the cause was a continuation of the “unexpected health issue” or “unexpected circumstance” mentioned at hearing the previous day, as reported below. Further information will be reported as it becomes available. And in a later update, the trial has been cancelled for the rest of the week. It is scheduled to resume Monday, Sept. 25 at 8:30 a.m.)
With 10th Western District of Virginia Federal Court Judge Elizabeth K. Dillon’s 9:30 a.m. arrival, court was convened on schedule Tuesday, September 19, in the criminal trial of Jennifer McDonald related to the estimated $26-million Front Royal-Warren County Economic Development Authority (FR-WC EDA, EDA) “financial scandal,” circa 2014 to 2018. As has been reported, after inheriting the case from two state prosecutors offices on August 25, 2021, a federal grand jury handed down 34 federal criminal indictments on a variety of charges, including bank fraud, wire fraud, money laundering, and aggravated identity theft against the former EDA executive director. Those charges relate to the alleged unauthorized transfer of EDA assets to McDonald’s own personal benefit, as well as that of alleged co-conspirators.
But rather than starting the trial on the second day of a week in which it has been forecast the trial could be coming to a fairly rapid conclusion with closing arguments by weeks end, the judge was informed that an unanticipated issue would put the trial on hold that day.
An “unexpected health issue” was referenced by lead prosecutor Sean Welsh as the reason for what apparently will be a one-day delay of the trial. However, defense counsel told the judge that the jury had been told an “unexpected circumstance” would be the reason they would not be needed at court that day. It might be noted that the lone missing person at the prosecution or defense tables during this discussion appeared to be defendant Jennifer McDonald.
In the defendant and jury’s absence several procedural matters were broached for additional discussion. One was review of submitted jury instructions. Another was gaining defense approval of allowing a prosecution witness’s testimony that had been scheduled to be heard Tuesday, to be submitted alternately without the need of her returning the following day from her Virginia Beach home to testify. It was explained her testimony would be fairly brief and was to be introduced to allow a related piece of evidence to be admitted as a prosecution exhibit (why does that sound familiar?). A final matter discussed before court recessed was the possible addition of a third defense witness identified as “James Woods”.
Following the court recess this reporter and another present (see you tomorrow, Alex?) tried to place the name James Woods. All we could come up with was the actor. — Wouldn’t want to miss THAT testimony, “Woods” we?
A Day in the Federal Criminal Prosecution of Jennifer McDonald
After an unexpected near-testimony adventure to Harrisonburg Federal Court the previous day — “We need you here now!” — on Wednesday, September 13, your humble reporter was called to testify in the third week of the federal criminal prosecution of former Front Royal-Warren County Economic Development Authority Executive Director Jennifer McDonald. McDonald is charged on 34 counts related to the Town-County EDA (FR-WC EDA, EDA) “financial scandal” as it has come to be known. Those charges include bank fraud, wire fraud, money laundering, and aggravated identity theft in what has been estimated as a $26-million unauthorized movement and use of EDA assets to the personal benefit of her and alleged co-conspirators.
Actually, it was the fourth week since the trial’s August 21st start. However, the post-Labor Day holiday week of September 5th to 8th was lost to a COVID outbreak among unnamed involved parties. The trial was initially forecast to take six weeks to complete. It might be noted that on September 13, McDonald was the only person with a COVID mask on at the defense table. And no one that I saw on the prosecution side or among the 15 jurors and alternates present wore a mask. Judge Elizabeth K. Dillon began the day mask-less, however, after a witness appeared wearing a mask who explained she had recently had COVID, the judge opted for a mask the rest of the day despite two court clerks spraying the witness stand next to the Judge’s seat down with disinfectant following that witnesses’ testimony — better safe than sorry.
As instructed, this witness, thanks to navigator/tag-team driver Paula’s assistance, arrived by 8 a.m. at the Harrisonburg federal court building for the scheduled 8:30 a.m. trial start that day. We then made our way to the third-floor courtroom area, where we settled in hallway seats with other scheduled witnesses as motions arguments were already being heard inside the courtroom.
Those motion discussions apparently included a third denial by Judge Dillon of the defense’s attempt to have this witness’s testimony excluded from the trial. That most recent motion was made the previous afternoon as this witness traveled south after being called around 2:45 p.m. by the prosecution’s victim-witness coordinator and told the trial was moving faster than expected and I would be needed to testify prior to adjournment on Tuesday, September 12.
Information garnered from some present through some of those motions filings was that the defense was trying to exclude evidence related to McDonald’s gambling excursions to Charles Town’s Hollywood Casino over a number of years paralleling her alleged misdirection of EDA assets to her own use and benefit. At any rate, the combination of that defense motion and an accident on I-81 southbound a bit north of Harrisonburg that blocked all lanes, leading to a ponderously slow detour on Route 11 around the wreck, led to no testimony from this witness the afternoon of Tuesday, September 12.
During a pre-trial meeting with lead prosecutor Sean Welsh, this witness was informed he would be questioned about his interview (late January 2018) with McDonald and subsequent Royal Examiner article published February 8, 2018, during which the EDA executive director claimed to have won a total of $1.8-million over a three-year period playing the slot machines at Charles Town’s Hollywood Casino. McDonald asserted it was this cash flow that allowed her to make some high-dollar residential real estate investments through her Da Boyz Real Estate LLC, among other purchases and financial assistance to some family members. It should be noted that as an EDA director, she was not allowed to invest in commercial real estate transactions. See “EDA Director Jennifer McDonald parlays casino winnings into real estate investments”
Under direct examination by Welsh, this witness verified the content of the above-linked story and the circumstance of it coming about, along with other details. Those details included recollection of what information was on what McDonald told me were tax receipts issued with her winnings, which she is holding up in a photo accompanying the article.
That recollection was that while containing the ID of Hollywood Casino and a variety of numbers, that I could not verify them as or as not the winning tax receipts McDonald asserted them to be. Asked by the prosecution how my professional relationship with McDonald had been leading up to that interview and story, I responded that it had generally been cordial and helpful, dating to her time as an assistant to past EDA Executive Directors Stephen Heavener and Paul Carroll prior to her succeeding them around 2008. I also testified that despite a shared personal skepticism (with my then-Royal Examiner colleague and editor Norma Jean Shaw) about the huge gambling winnings aspect of the story, we decided to publish it as presented and see how it played to the public, including involved parties at the EDA and town and county governments.
And without even a nod “goodbye” from the defense side of the room, I guess because they didn’t want me to testify in the first place, I was released as a witness, meaning at last, I would be able to observe the trial as it progressed from this point forward as my work schedule permitted me to go to Harrisonburg.
And it proved to be an interesting balance of the day in court. Subsequent witnesses called by the prosecution included, in order of appearance following my testimony, Larry Tuttle Sr., the cousin of McDonald’s step-father George Hassenplug; Rappawan Vice-President William Vaught Jr.; McDonald’s aunt Jeanette Campbell, a broker with Campbell Realty/Century 21; Hollywood Casino Risk-Compliance Director Laura Gatto; and Virginia State Police Investigator Brad Gregor. I will begin my description of the testimony of these witnesses with Hollywood Casino’s Laura Gatto, as it relates most directly to my above-referenced testimony.
On direct examination, Gatto explained “player records” kept through what she termed “player cards” with which the casino tracks the gambling efforts, wins and losses, including money in/money out on slot machines. She also noted the casino would not pay out jackpots — wins over $1200 — if someone is using another person’s player card. And while on cross-examination defense counsel would attempt to demean the accuracy of these tracking systems, Gatto responded by noting that while not given to be used by casino players to report their tax payments and debt, the casino itself uses these records as a tool to build its business model and in recording its tax responsibilities.
Back on direct examination, Gatto said that McDonald reached the level of “Icon Player” on the slots. And if I got the numbers right, and they were big ones, Gatto stated that Hollywood Casino’s player records indicated that in the period from 2014 to 2018 on the house slot machines, Jennifer McDonald cashed out $17,059,450.25 while cashing in $21,778,337.46. That is over a $4.7 million deficit of playing versus winning, $4,718,887.21, to be exact. And if I am interpreting these numbers correctly, it would seem to indicate that while there may have been points where McDonald was on the plus side, perhaps even significantly, it would seem unlikely that she would have been plus $1.8 million in late January 2018. That is because to come out $4.7 million on the downside at the end of 2018, she would have had to hit an 11-month losing streak totaling over $6.5 million. Now, I’m a word guy, not a numbers guy, but even I can see that’s an exceptionally bad slide, especially for an “Icon Player.” But I guess there’s a reason they call them “one-armed bandits.”
I will note here that three of the other four prosecution witnesses I saw testify, Larry Tuttle Sr., McDonald’s stepfather’s cousin; Rappawan Vice-President William Vaught Jr.; and McDonald’s aunt, Campbell Realty broker Jeanette Campbell, testified as to their knowledge or lack thereof, and participation in real estate transactions, particularly one on Buck Mountain Road (see more below), related to the alleged misdirection of EDA assets to the defendant’s personal use or benefit. I hope to recount more of that testimony, as time and unfolding trial events allow, in a future story.
State Police interview into evidence
Following a lunch break, VSP Investigator Brad Gregor was called to the stand to comment on a two-hour videotaped interview he did with McDonald on December 19, 2018, the day before she resigned by email as the EDA Board of Directors met in Closed/Executive Session to discuss her future with the EDA. That video was introduced as Prosecution Exhibit 531-A, with its transcript introduced as Exhibit 532 (that is a lot of exhibits, and who knows how many pages each exhibit may be). During Gregor’s testimony, amidst the prosecution’s playing of the video of the interview, it was noted that McDonald had requested a meeting with the State Police in response to some allegations about her financial activities being circulated through social media and elsewhere. Kristie Atwood’s name was mentioned during Gregor’s testimony.
What McDonald didn’t know at the time was that in response to that same information being in the public domain, as well as Virginia State Police hands, VSP had launched an investigation into her financial affairs. And it was Gregor, a white-collar crime expert of 10 years with VSP after retiring from 29 years with the FBI, who was assigned to head that VSP investigation. Particularly through opening portions of the interview, one can see Gregor leading McDonald into explanations of her financial role and authority at the EDA versus her targeted discussion of why she thought she was being scapegoated by her board and others for what she asserted were group decisions on financial transactions that suddenly her board of directors had “forgotten” they had authorized.
The issue of two EDA signatures, including a board representative’s along with hers, being required procedurally by the EDA on financial transactions was referenced by McDonald in the video interview with Gregor. That dual signature defense claim has led to prosecutorial counterclaims of forged signatures, including during early hearings when the case was still at the state level. The federal indictment on aggravated identity theft would indicate that it would be re-raised at this trial in at least one situation, believed to be a claim by ITFederal principal Truc “Curt” Tran regarding his signature appearing in one of McDonald’s real estate transactions. I believe it likely that would be the one involving all three witnesses heard earlier on September 13, Larry Tuttle Sr., Rappawan Vice-President William Vaught Jr., and Jeanette Campbell, regarding the Buck Mountain Road property bought and sold within about a month at a $600,000 loss.
That EDA board closed session scheduled for December 20, 2018, the day after the Gregor-McDonald interview, was called in the wake of increasing municipal and EDA scrutiny through 2018 about some of McDonald’s financial activities, including those personal real estate transactions involving the cash she claimed to have won through her Hollywood Casino slot machine activities. It was anticipated that her board would terminate her out of that Executive Session. In fact, McDonald told Gregor during that videotaped interview that she anticipated losing her job the next day due at least in part to then Warren County Administrator Doug Stanley turning her EDA board against her in retaliation for what she claimed was sexual harassment she was enduring from Stanley and another member or two of the community at the time. Stanley was one of the prosecution’s first witnesses in this trial, and his cross-examination reportedly one of the most, if not the most, explosive points of the trial. And darn, I missed it because I was on the far side of the prosecution’s witness list.
The EDA financial scandal has led to multiple civil court cases, with a string of liability convictions, appeals of some of those liability jury findings, and out-of-court settlements surrounding the estimated $ 26 million dollars alleged to have been moved illegally by McDonald and alleged co-conspirators to her and their personal benefit. McDonald herself settled out of civil court with the EDA, sending an estimated $9 million of real estate assets to the EDA under a “no-fault” settlement agreement in which she admitted no wrongdoing in acquiring those assets.
From Economic Pinnacle to Courtroom Spotlight: Jennifer McDonald’s $26-Million Scandal Unfolds – Day 9
Front Royal-Warren County Economic Development Authority’s Shining Star Faces Allegations of Massive Fraud.
For those who’ve watched Jennifer McDonald’s meteoric rise in the economic circles of Front Royal-Warren County, the news was nothing short of a shock. The woman once celebrated for her dynamic contribution to the Front Royal-Warren County Economic Development Authority (FR-WC EDA) now finds herself entangled in a complex web of accusations amounting to a mind-boggling $26 million fraud.
The scene is set in Harrisonburg, Virginia, where the courtroom of the U.S. v. Jennifer Rae McDonald case has been buzzing with activity. For nine court days, riveted attendees have heard testimonies that swing the pendulum of public opinion with each passing hour. Day 9 especially stood out. Judge Elizabeth K. Dillon presided over an intense session that spanned from daybreak to dusk. Key witnesses like Robert Boyd, Katrina Gochenour, and SA Justin Hasty gave their accounts, each narrative serving as a piece in the intricate puzzle that determines McDonald’s fate.
However, a significant twist arose when McDonald moved to exclude certain testimonies, particularly one from Roger Bianchini, a reporter with the Royal Examiner newspaper. McDonald’s primary contention revolves around an article Bianchini penned detailing her claims of slot machine winnings at the Hollywood Casino. McDonald showed Bianchini tax receipts as proof of her so-called success. While the government perceives this as pivotal evidence, McDonald’s legal team argues otherwise. They claim the article and testimonies based on it could derail the trial’s trajectory, casting shadows where clarity is sought. Ruling coming soon.
The trial’s continuation on 9/12/2023 promises more revelations and perhaps a step closer to unraveling the truth. For now, a community waits with bated breath, hoping the scales of justice will balance out, shedding light on a controversy that has overshadowed one of its most prominent figures.
The Marathon Continues: A Deep Dive into Days 6-8 of U.S. v. Jennifer Rae McDonald
Witness Testimonies Pile Up as the Government Sustains its Case.
The U.S. v. Jennifer Rae McDonald trial in Harrisonburg, Virginia, has steadily unfolded over a span of eight days, featuring a multitude of witnesses and exhaustive presentations from the prosecution. For those following the riveting courtroom drama, it’s evident that the government is doubling down on its evidence against the defendant, Jennifer Rae McDonald, who remains on bond.
Day 6: Seven Hours, Seven Witnesses
Day 6 kicked off with Katrina Gochenour resuming her testimony, followed by an array of witnesses, including Kevin Nicholson, Robert Boyd, Alan Omar, John Reno, Timothy Ivan Kelsey, and Steve Duke. Each provided unique insights into the case at hand, substantiating the government’s narrative. The day concluded after a grueling 7 hours and 14 minutes in court, leaving onlookers pondering what would follow in the subsequent hearings.
Day 7: Fresh Faces, Familiar Narrative
Day 7 saw FBI Special Agent Steve Duke continue his testimony, along with new witnesses, including Elain Kinsey, Desiree Scott, Tracy Bowers, Christina “Christy” Grady, Tricia Dorsey, and Heather Clatterbuck. These testimonies maintained the prosecution’s momentum, reinforcing the government’s case.
Day 8: Short and Sharp
While Day 8 was shorter, clocking at just 1 hour and 20 minutes, it was no less impactful. Presided over by Judge Elizabeth K. Dillon, the day featured three witnesses: Debra Morfit, Kathy Whittington, and Eugene Gorlik. Each had their own contributions to the government’s ever-expanding case, leading many to wonder how the defense would counteract in the upcoming sessions.
The complexity of the case and the volume of evidence presented give no indication of a speedy resolution. Judge Dillon confirmed that the trial will resume at 9:00 a.m. on Tuesday, September 5th, 2023.
The U.S. v. Jennifer Rae McDonald trial, unfolding in the Western District of Virginia, is proving to be a marathon, not a sprint. With the government fielding an extensive list of witnesses and working meticulously to build its case, the outcome is anybody’s guess. As the defendant remains on bond, the jury, the legal teams, and the public can only wait and watch as the case evolves. All eyes will undoubtedly be on the courtroom when proceedings resume next week.
Legal Tug-of-War: Cross-Examination Rights and Relevance in U.S. v. McDonald, Day 5 continued
A Deep Dive into the Controversial Courtroom Dynamics of the Jennifer Rae McDonald Trial.
The courtroom is no stranger to drama, but the ongoing trial of Jennifer Rae McDonald, prosecuted by the United States in the Western District of Virginia, has elevated that tension into an intense discourse on the role and limits of cross-examination in the American legal system. At the eye of this storm is Doug Stanley, a government witness whose testimony has been a lightning rod for debates on witness credibility, prosecutorial overreach, and the defendant’s right to a fair trial.
In recent developments, defense counsel sought to question Mr. Stanley on allegations related to sexual harassment and/or assault. The government objected, stating that there was “absolutely no basis for these questions,” further questioning their relevance. This has led to a renewed focus on the critical role of cross-examination in the American judicial system.
The Supreme Court in Alford v. United States stated that cross-examination is a “matter of right” and further described it in Davis v. Alaska as a means by which “the believability of a witness is subject to exploration at trial.” So when the government seeks to limit this aspect of the trial process, it’s bound to draw scrutiny not only from legal experts but from anyone concerned with the concept of fair trials.
The defense argues that they have a good faith basis for the questions. McDonald, the defendant, had previously made allegations against someone in Warren County and a judge, as well as against Doug Stanley. She had filed grievances and described a deteriorating situation, thereby giving the defense grounds for their line of questioning. It should be noted that having a “well-reasoned suspicion” suffices for establishing a good faith basis, as per United States v. Sampol.
The second pillar of the defense’s argument is that the government itself “opened the door” to these questions. During the trial, the prosecution made an effort to introduce evidence of a sexual assault/harassment settlement agreement, thereby inviting further scrutiny into related matters.
Lastly, the defense argued that these questions are not just window dressing; they are relevant. If the government plans to introduce a sexual assault settlement agreement into evidence, as they’ve stated, then any evidence of sexual assault or harassment becomes relevant under the Federal Rules of Evidence 401.
The objection raised by the government against the cross-examination of Doug Stanley touches upon broader, often murky issues related to the limitations of prosecutorial discretion and the rights of a defendant. It brings to focus the balancing act courts must perform between the need for an unbiased trial and protecting the rights of all parties involved. As the trial of Jennifer Rae McDonald progresses, it will serve as a real-time case study for law students, scholars, and citizens alike who are concerned with the fairness and integrity of the American judicial system.
The Jennifer McDonald Trial: Witness Parade Continues, Day 5
The testimony list expands, the evidence pile grows, and Judge Elizabeth K. Dillon maintains strict order as the court delves deeper into the intricate case against Jennifer McDonald.
On Monday, August 28, 2023, the federal courtroom under Judge Elizabeth K. Dillon hummed with anticipation. Jennifer McDonald, the former Executive Director of Front Royal-Warren County Economic Development Authority (FR-WC EDA), faced another grueling day of proceedings. For seven hours and five minutes, the court scrutinized a series of witnesses and evidence. The aim? To untangle a convoluted web of financial misconduct allegedly spearheaded by McDonald.
Continuing from last week’s proceedings, Doug Stanley was once again among the government’s first witnesses. As a recurring figure in this case, his testimonies are proving to be integral to the government’s narrative. Following Stanley, the courtroom saw a succession of new faces: Scott McKay, Jennifer Files, Steven Duke, Kenneth W. Hart, David McClelland, David Cook, and Katrina Gochenour. The inclusion of such diverse witnesses indicates that prosecutors are leaving no stone unturned.
As the government continued its presentation of evidence, what was apparent was the intense scrutiny Judge Dillon applied to each document, statement, and exhibit. The time stamps reveal that the court devoted hours meticulously dissecting every angle of this multifaceted case. For instance, the morning session went on for a little over an hour before a brief pause and then continued for nearly two hours more. The afternoon was even more intense, ending just five minutes shy of 6:00 p.m.
One particular aspect of the trial that stands out is the focus on details. From bank transactions to real estate dealings and beyond, the government seems committed to a rigorous examination of McDonald’s professional life, stretching from her time at FR-WC EDA to her eventual resignation and the consequential legal fallout.
While McDonald remains on bond, it’s worth mentioning that this case initially started at the state level, got transferred through various jurisdictions, and has now reached the federal court. This complex route reflects the gravity and complexity of the charges McDonald faces. The prosecution has exhibited surgical attention to detail, likely a result of the trial’s classification as “complex” due to the sheer volume of involved evidence.
As the trial adjourns until 9:00 a.m. on Tuesday, what’s clear is that the prosecution is methodically building its case. The list of witnesses has grown and is expected to continue expanding as the government seeks to solidify its position. While no conclusion is yet in sight, the meticulousness of these proceedings suggests that both the prosecution and defense are gearing up for an exhaustive legal battle. For now, all eyes are set on what Tuesday’s session will unravel.