On Friday, October 18, the attorney for the organizers of a citizens group seeking removal of all five Warren County Supervisors filed the Petition for that removal with a total of 941 signatures attached, broken down by County Voting Districts.
The filing required a minimum of 10% of the number of registered county voters who voted in the last election. That number is cited as 6,958, requiring a total of 696 countywide. However self-identified “primary organizer” of the petition drive, Bonnie Gabbert, noted in an affidavit filed with the petition that she had rounded each voting district’s total up, raising that minimum required signature total to 699.
So while the petition total of about one-seventh of the county’s most recent voting population does not indicate majority support for the recall, it does meet the State requirement for such a matter to be brought before a Circuit Court judge. And it appears on information from petition attorney Timothy Johnson that for the same reasons of personal or professional familiarity with defendants leading to recusals in EDA cases, that Warren Circuit Court Judge William Sharp will recuse himself from the recall hearing as well.
Johnson told Royal Examiner he believes Chief 26th Judicial District Judge Bruce D. Albertson, who has been presiding at EDA civil and criminal case hearings will preside at the scheduled October 28 Show Cause removal petition hearing. Albertson was already scheduled to be here that day to hear a number of defense motions to quash the very charges the main thrust of the removal is based on.
The removal petition cites the board members’ September 20th misdemeanor criminal indictments related to an absence of due diligent oversight of the actions of former Warren County Economic Development Executive Director Jennifer McDonald in the final four months of 2018 as a primary legal basis of the removal.
“Pursuant to Va. Code § 24.2-233(1), a Circuit Court may remove from office any elected officer residing within the jurisdiction of the Court for neglect of duty, misuse of office, or incompetence in the performance of duties when that neglect of duty, misuse of office, or incompetence in the performance of duties has a material adverse effect upon the conduct of the office.
“On September 20, 2019, Supervisors Daniel J. Murray of the North River District, Thomas H. Sayre of the Shenandoah District, Tony F. Carter of the Happy Creek District, Archie A. Fox of the Fork District, and Linda Glavis of the South River District were indicted for violating the English Common Law, and specifically, each were charged on three misdemeanor counts …” of misfeasance and nonfeasance in the conduct of their office as previously reported (see below linked story).
The petition acknowledges the coming November 5 election in which two supervisors, Chairman and North River Supervisor Dan Murray and South River Supervisor Linda Glavis are not seeking reelection; and Shenandoah District Supervisor Tom Sayre is in a race with Walter Mabe. It also notes that Fork District Supervisor Archie Fox and Happy Creek Supervisor Tony Carter are not up for reelection until November 2021.
Regardless of those electoral variables, the petition asks the court “to suspend the Respondent-Supervisors from performing their duties in office until the Show Cause hearing is held”. There are no Board of Supervisors meetings scheduled prior to that October 28 Show Cause hearing that will revolve around the defendants’ arguments as to why they should not be removed.
And one might make an educated legal guess that at least part of those defense arguments will revolve around the same Sovereign Immunity issue the EDA has raised in the Town of Front Royal’s civil action against it.
“Sovereign Immunity is ‘a rule of social policy, which protects the state from burdensome interference with the performance of its governmental functions … Most importantly, the doctrine of Sovereign Immunity provides for ‘smooth operations of government’ and prevents ‘citizens from improperly influencing the conduct of governmental affairs through the threat or use of vexatious litigation,’ ” a motions filing in the Front Royal vs. EDA civil suit reads.
In addition to its primary Show Cause allegations regarding the misdemeanor indictments cited lack of due diligent oversight of the former EDA executive director late in 2018 the recall petition also alleges a number of other board failings since that time.
Those include failing to take corrective action to prevent a recurrence of the past absence of economic development oversight and use of public money; failing to “review critical financial information” related to a recent bond consultant initiative to refinance some existing capital improvement bonds that could save the County several million dollars; and allowing the EDA purchase of what is described as the “Westrock LLC warehouse purchase” (aka 426 Baugh Drive warehouse) at a price of $5.3 million.
While the removal petition allegations surrounding the misdemeanor indictments and other past absences of EDA oversight appear to have a solid footing for legal arguments, some of the peripheral allegations may have a less substantial foundation.
Unlike some other EDA owned properties, the Braugh Drive warehouse has been cited by current EDA officials as “just the type of property” an EDA should purchase for marketing/sale to a job creating company.
The alleged failure to launch corrective measures and lack of bond refinancing scrutiny seem to ignore several board initiatives and consultant processes. Those include the supervisors’ participation in an EDA Reform Committee and joint County-Town-EDA meetings held to discuss just such corrective measures, many already in the process of being implemented by the EDA and County, including the County’s assumption of the role of the EDA’s financial agent with check-writing authority.
The alleged lapse of due diligence regarding bond refinancing seems to ignore the County’s long-time use of bond consultant Davenport & Associates to perform that very bond reissue due diligence in recommending actions to the supervisors.
And the allegation of wrong doing in the tabling a decision on whether the County will fund the legal defense of the supervisors on their misdemeanor charges to December ignores the explanation that a decision be deferred until the motions to quash the indictments have been heard. That could be a factor in a decision as a compromise solution of the County using taxpayer money for the supervisors defense counsel only if the charges are dropped or the supervisors are acquitted at trial was broached during October 1 meeting discussion.
Those defense motions to quash the misdemeanor misfeasance and nonfeasance indictments against County and EDA officials, as well as Discovery motions if necessary, are slated for hearing on October 28, the same day as the Show Cause hearing on the recall is on the court docket.
Among other EDA McDonald-related oversight lapses cited in the recall petition are the “red flag” of McDonald’s public story of “substantial gambling winnings” to account for her use of cash in her real estate businesses; as well as the sale of the 30-acre ITFederal parcel at the Royal Phoenix/Avtex site “for substantially below fair market value”.
One might say “substantially below” in that the publicly discussed $2 million 30-acre parcel was gifted to ITFederal LLC for one dollar in an effort to “jump start” further development at the 147-acre planned Royal Phoenix Business Park site. Four years later that plan is floundering and ITFederal and its CEO Truc “Curt” Tran are defendants in the EDA’s $21.3 million civil suit. In its first month of existence Royal Examiner broke the story of that one dollar sale being the reason for a one-year delay in U.S. Justice Department approval of the sale (see below linked story).
The EDA is seeking recovery of the balance of its $10 million First Bank & Trust loan to ITFederal on the grounds it was obtained “under false pretenses”. Despite that EDA civil suit contention, Tran and his Congressional sponsor Robert Goodlatte, who helped and/or stood silently by as McDonald pushed those alleged “false pretenses” into the municipal and public consciousness, have thus far remained off the EDA Special Grand Jury criminal indictment radar.
Indicted in addition to the five supervisors on September 20 by the EDA Special Grand Jury were County Administrator Doug Stanley, former EDA/County Attorney Dan Whitten, former EDA Board members Ron Llewellyn, Bruce Drummond, Greg Drescher, William “Billy” Biggs and current EDA Board members Mark Baker, Tom Patteson, Gray Blanton. Each faced three identical charges, two counts of Misfeasance and one count of Nonfeasance in the conduct of their public offices.
October 28 should be a long and interesting day in Warren County Circuit Court.
Interested in reading the petition? See below.
CIRCUIT COURT OF THE COMMONWEALTH OF VIRGINIA,
COUNTY OF WARREN
|In re Joint Petition for Removal of Daniel J. Murray, Thomas H. Sayre, Tony F. Carter, Archie A. Fox, and Linda Glavis
BONNIE GABBERT, as representative petitioner for North River District, KRISTINA C. NELSON, as representative Petitioner for Shenandoah District, MAUREEN SCHOFIELD, as representative petitioner for Happy Creek District, MARK HAJDUK, as representative petitioner for Fork District, JEAN M. STANLEY as representative petitioner for South River District, and all other signatories to this Joint Petition from their respective magisterial districts, Petitioners,
DANIEL J. MURRAY, THOMAS H. SAYRE, TONY F. CARTER, ARCHIE A. FOX, and LINDA GLAVIS,
PETITION FOR REMOVAL OF ELECTED OFFICIALS
Named Petitioners as representatives for Warren County’s magisterial districts, and the attached signatories to this Petition for Removal of Elected Officials who are registered voters who reside within the jurisdiction of the respective officer being petitioned for removal and who have signed this petition under penalty of perjury seek the removal from elected office of Respondent-Supervisors DANIEL J. MURRAY, THOMAS H. SAYRE, TONY F. CARTER, ARCHIE A. FOX, and LINDA GLAVIS, state as follows:
- Pursuant to Va. Code § 24.2-233(1), a Circuit Court may remove from office any elected officer residing within the jurisdiction of the Court for neglect of duty, misuse of office, or incompetence in the performance of duties when that neglect of duty, misuse of office, or incompetence in the performance of duties has a material adverse effect upon the conduct of the office.
- On September 20, 2019, Supervisors Daniel J. Murray of the North River District, Thomas H. Sayre of the Shenandoah District, Tony F. Carter of the Happy Creek District, Archie A. Fox of the Fork District, and Linda Glavis of the South River District were indicted for violating the English Common Law, and specifically, each were charged on three misdemeanor counts as stated as follows:
(a) On or about September 1, 2018 through December 31, 2018, in the County of Warren, [respective supervisor’s name], did unlawfully commit nonfeasance by failing to act to limit or restrict the powers, responsibility, and access to the public financial resources of Jennifer Rae McDonald in her position as Executive Director of Front Royal Warren County Virginia Economic Development Authority resulting in financial loss to Warren County, in violation of Section 1-200 and 19.2-8 of the Code of Virginia, 1950, as amended.
(b) On or about September 1, 2018 through September 25, 2018, in the County of Warren, [respective supervisor’s name], did unlawfully and negligently commit misfeasance by not properly exercising his/her powers of appointment, oversight, and removal, of Jennifer Rae McDonald in her position as Executive Director of Front Royal Warren County Virginia Economic Development Authority resulting in the unlawful diversion of more than $300,000 in public funds, in violation of Section 1-200 and 19.2-8 of the Code of Virginia, 1950, as amended.
(c) On or about October 20, 2018 through November 30, 2018, in the County of Warren, [respective supervisor’s name], did unlawfully and negligently commit misfeasance by not properly exercising his/her powers of appointment, oversight, and removal, of Jennifer Rae McDonald in her position as Executive Director of Front Royal Warren County Virginia Economic Development Authority resulting in the unlawful diversion of more than $9,000 in public funds, in violation of Section 1-200 and 19.2-8 of the Code of Virginia, 1950, as amended.
- These criminal charges stem from the Respondents’ failures to perform their duly elected duties, and ensure proper use of and safekeeping of Warren County’s taxpayers’ monies. Aside from the criminal charges as stated, the Petitioners further allege that the Respondent-Supervisors neglected their duties or otherwise were incompetent to perform their duties by:
(a) Failing to establish policies and procedures that would have ensured a proper accounting oversight of the Warren County Economic Development Authority, including its Executive Director, in contravention of its duty to establish appropriate oversight policies pursuant to Va. Code § 15.2-403(A);
(b) Failing to require and actually review regular, sufficiently descriptive financial and other activity reporting from the Warren County Economic Development Authority, including its Executive Director, and any other financial monitoring department such as the from the Commissioner of Revenues, and/or the Warren County Treasurer, and/or the Finance & Purchasing Department pursuant to Va. Code § 15.2-403(B);
(c) Failing to inquire into official conduct of the Warren County Economic Development Authority’s Executive Director when ‘red flags’ were presented such as her alleged substantial “gambling winnings,” the ‘data center project’ land being sold for substantially below fair market value, and when the Executive Director acknowledged falsifying invoices pursuant to Va. Code § 15.2-403(C);
(d) Failing to account for the “Westrock LLC” warehouse purchase for more than $5.3 million, which served no apparent benefit to the citizens of Warren County and no apparent plan for said warehouse;
(e) Failing to take appropriate corrective actions to ensure that such gross errors in accountability cannot happen again as no proposed solutions have been presented to the public or to the Board of Supervisors to establish proper policies and procedures, or otherwise improve financial oversight; and
(f) As recently as October 1, 2019 at the most recent Board of Supervisors meeting, admittedly failing to review critical financial information concerning revenues and County bond information that would be used to fund Warren County services, and for refusing to decide an agenda item concerning whether the taxpayers of Warren County were to pay for the criminal defense costs associated with the Supervisors’ criminal indictments stemming from the charges related to their misfeasance and nonfeasance in office and postponed such a decision until December 2019.
- The above-stated actions have caused irreparable injury to the interests of the Warren County Government and the citizens whom it is supposed to serve. Millions of dollars of taxpayer monies have been embezzled or otherwise misplaced; trust in local government officials and the departments they work for has been broken; and the reputation of Warren County is forever tarnished. The Respondent-Supervisors have allowed these injuries to occur, and have taken inadequate actions to remedy the errors.
- Two Supervisors (Mr. Murray and Ms. Glavis) are not seeking re-election, and one Supervisor (Mr. Sayre) is running for re-election next month. The other two Supervisors (Mr. Carter and Mr. Fox) are not subject to an election until November 2021.
- As the criminal charges are pending, the citizens of Warren County believe that the Respondent-Supervisors are not in a position where they can capably perform their duties while also addressing such criminal allegations. Aside from the criminal charges, the Respondent-Supervisors have failed to present any cognizable plan of addressing the lack of accountability and oversight, and have demonstrated that they cannot perform their duties competently.
- The Petitioners request that the Court suspend the Respondent-Supervisors from performing their duties in office until the Rule to Show Cause hearing is held pursuant to Va. Code § 24.2-236.
- This Petition has been signed by the requisite number of registered voters who seek to remove their respective Supervisor from office. From the last election for that respective Supervisor’s election, the following number of registered voters voted in the respectively stated districts were as follows:
|Magisterial District||Number of Voters in Last Election Cycle|
|North River District||1,084|
|Happy Creek District||1,811|
|South River District||1,107|
Pursuant to Va. Code § 24.2-233, this Petition is accompanied by signatures of registered voters who reside within the jurisdiction of the respective Supervisor totaling at least ten percent (10%) of total number of votes cast at the last election for the office that the officer holds.
WHEREFORE, Petitioners respectfully request that this honorable Court award the following relief:
- Issue a Rule to Show Cause to the Respondent-Supervisors requiring that the Respondents appear before this Court and show cause why they should not be removed from office, and that such hearing be held no less than five but not more than ten days from the filing of this Petition;
- As part of issuing the Rule to Show Cause, issue an Order suspending the Respondents from their elected official positions on the Warren County Board of Supervisors until such Rule to Show Cause Hearing is heard;
- Upon hearing sufficient evidence proven by a preponderance of the evidence, remove the Respondents from their positions in office; and
- Grant other and further relief as the Court deems just, proper, and equitable.
Dated: October 3, 2019 Respectfully submitted,
Timothy R. Johnson (VSB No. 87673)
The Law Offices of Timothy R. Johnson, PLC
20-B East Main Street
Berryville, Virginia 22611
P: (540) 352-4672
F: (540) 595-3500
Counsel for Petitioners
VERIFICATION BY REPRESENTATIVE PETITIONERS
- I, Bonnie Gabbert, a resident of the North River District within Warren County, have reviewed the allegations in the Petition for Removal of Elected Officials, and affirm under penalty of perjury that such allegations are true and accurate to the best of my knowledge.
- I, Kristina C. Nelson, a resident of the Shenandoah District within Warren County, have reviewed the allegations in the Petition for Removal of Elected Officials, and affirm under penalty of perjury that such allegations are true and accurate to the best of my knowledge.
- I, Mark Hajduk, a resident of the Fork District within Warren County, have reviewed the allegations in the Petition for Removal of Elected Officials, and affirm under penalty of perjury that such allegations are true and accurate to the best of my knowledge.
- I, Maureen Schofield, a resident of the Happy Creek District within Warren County, have reviewed the allegations in the Petition for Removal of Elected Officials, and affirm under penalty of perjury that such allegations are true and accurate to the best of my knowledge.
- I, Jean M. Stanley, a resident of the South River District within Warren County, have reviewed the allegations in the Petition for Removal of Elected Officials, and affirm under penalty of perjury that such allegations are true and accurate to the best of my knowledge.
UPDATE: McDonald Trial Conclusion — So Close and Yet a Month Away
(UPDATE: According to the 10th Western District of Virginia federal website, Judge Elizabeth K. Dillon has set aside the week of Monday, October 23, through Friday, October 27, for the criminal trial of former FR-WC EDA Executive Director Jennifer McDonald to resume and run to conclusion. As reported below, involved attorney expectations are that the trial could be turned over to the jury for deliberations on the 34 criminal indictments the defendant faces within two to three days once the trial resumes. The prosecution will call its 57th and final witness when the trial is reconvened. The defense is then anticipated to only call one or two witnesses before resting and heading the trial into closing arguments.)
After a second week (Sept. 19 to 22) and an additional day, Monday, September 25, lost to the “unexpected health issue” or “unexpected circumstance” referenced at a motions hearing last week, the federal criminal prosecution of former Front Royal-Warren County Economic Development Director Jennifer McDonald was again put on hold on Tuesday, September 26. And with the defendant again the only principal absent at the defense or prosecution tables, and no court official and none of the 15 jurors and alternates missing, the smart money “in Vegas” or at Charles Town’s Hollywood Casino is on McDonald as the focal point of that unexpected “health issue” or “circumstance.” In fact, it might be recalled that in the wake of one of her arrests, while her prosecution was initially at the state level, McDonald had to be transported from jail to a hospital for medical care, believed to be heart rate or blood pressure related.
In fact, during an 8:30 a.m. motions hearing, defense counsel forwarded a motion for a mistrial due to the repeated delays and uncertainty on a time frame moving forward at trial. Lead prosecuting attorney Sean Welsh countered the mistrial argument, citing case histories and circumstances of longer delays in which mistrial motions were denied. Welsh also told the court he didn’t feel the defense had “proved anything beyond speculation” to justify a mistrial, including any “cumulative” negative impact on jurors from delays.
After the hearing was closed to the media or the public several times to let personal variables of involved parties not be made public, Judge Elizabeth K. Dillon posed the alternative of “briefly suspending the trial” and resuming it as an alternative to a mistrial. Dillon said she would take the defense mistrial motion “under advisement.” However, the effort to pin down a coming week in which to continue the trial, which appears to currently be delayed for an unknown amount of time, seemed to indicate the judge preferred the alternative to declare a mistrial.
Prosecutor Welsh pointed out how close the trial likely is to being completed and handed over to the jury for deliberation. He noted the prosecution team had called 56 witnesses to the stand, with just one remaining to be called. He forecast that it now seemed the defense would call only one witness, with closing arguments possibly coming within two days. The defense witness list has been cited at two, with a third potentially to be added. The defendant is not anticipated to take the stand.
The initial motions hearing convened at 8:30 a.m. was recessed at 9:34 a.m. until 11 a.m. when the jury was instructed to report to court Tuesday. Reconvened at 11 a.m., the hearing was again closed for a time as the court queried jurors on their prospective plans for the coming weeks under consideration for restarting the trial without the current day-to-day uncertainty it would proceed. A time frame of two to six weeks was cited for reconvening the trial if a decision to suspend was reached. However, the prosecution wondered if additional relevant information might not be helpful in pinning down how soon a restart might be feasible. When Welsh proposed such input, possibly by subpoena, as early as the following day, Judge Dillon called that scenario “highly unlikely.” The court adjourned at 11:30 a.m. with no clear path forward apparent.
So, a decision on how this trial will proceed and when, and possibly even if it will proceed, is currently on hold pending additional information to be received by the court. And apparently, as noted in the above “Update” that information was received late Tuesday afternoon, September 26, with the trial now poised to resume on Monday, October 23, at 8:30 a.m.
As previously 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 FR-WC EDA executive director.
WC EDA Prepares to Rent Its Kendrick Lane Office Space, Reviews Strategic Plan, Avtex Site Security
The Front Royal Warren County Economic Development Authority (EDA, WC EDA) held its monthly meeting on Friday, September 22, 2023, at 10:30 a.m. There were seven Board members and legal counsel present, along with County Director of Economic Development Joe Petty.
The regular meeting began with Committee and Board Reports. Board Vice-Chair J.D. Walter reported that EDA documents have been moved into storage to make the Kendrick Lane space available to lease.
Jim Wolfe discussed a plan of action to review the EDA’s Strategic Plan with the possibility of a special meeting in November. Jorie Martin recently met with the Front Royal Police Department regarding enforcement action for trespassers on the Avtex Redevelopment Property due to safety and security concerns. Director of Economic Development Joe Petty provided updates on the next Open-Door Business Session, the recent Worlds of Work program, the IT transition, current EDA finances, and other economic activities in the community.
The Board concluded the meeting with a closed session to discuss the potential disposition of real property to business prospects and legal consultation on active litigation. No new business followed the closed session.
The next regular monthly Board meeting will be held on Friday, October 27, 2023, at 8:30 a.m. at the Warren County Government Center.
(From a release by the WC EDA)
In From New York State Larry Tuttle Sr. Steps to the Plate, I Mean McDonald Federal Trial Witness Box
With the federal criminal prosecution of Jennifer McDonald again on hold, this time from Tuesday, September 19 through Friday, September 22, if not longer, due to what was described by the prosecution as an “unexpected health issue,” we decided to fill the gap with a recounting of earlier testimony this writer witnessed in the wake of his own testimony of Wednesday, September 13. As previously reported, McDonald is charged on 34 counts related to the Front Royal-Warren County Economic Development Authority (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.
As reported in my lead story on my two days, September 12 and 13, in the 10th Western District of Virginia federal courthouse, among the other witnesses scheduled that day after my testimony was Larry Tuttle Sr. Tuttle identified himself as defendant Jennifer McDonald’s stepfather George Hassenplug’s cousin. He is a resident of Monroe, New York, he told the prosecution during direct examination. He also noted that he was last employed in 1993, before being in “a terrible car accident,” after which he has survived on Social Security disability benefits of about $1700 a month, he said in response to a direct examination question. Spending some time near Tuttle and what I believe was his wife in the courthouse third-floor hallway prior to either of our testimonies, I could see that he had some difficulty moving around, rising, and sitting back down.
As I watched his testimony following my own, the prosecution’s interest in Tuttle soon became apparent. He testified that as a favor to his cousin, George Hassenplug, he had signed some apparently partial real estate documents sent to him at his New York home during the time frame coinciding with some of the Jennifer McDonald real estate transactions that later came under legal scrutiny as allegedly involving misdirected EDA assets. Tuttle testified that while he knew who Jennifer McDonald was due to his cousin’s relationship with her by marriage to McDonald’s mother, that he did not know her personally and had never met her.
Asked if he was close to his cousin George Hassenplug, Tuttle replied that he “had been” from the 1990s to 2017 and that they had talked on the phone three to four times a week regularly during that period. Tuttle also testified that he didn’t own, nor was he invested in any property. As for real estate experience, he noted that he had a mortgage on a home prior to his accident.
Prosecution counsel asked Tuttle if he knew William “Billy” Biggs or had ever discussed business opportunities with him. Biggs was a long-time Front Royal-Warren County Economic Development Authority Board of Directors member and treasurer during and prior to McDonald’s EDA executive directorship, circa 2008 to 2018. Tuttle replied “no” to both questions, the second one on the “business opportunities” query after a defense objection was overruled by Judge Elizabeth K. Dillon.
Tuttle was then asked a series of questions, many about loans apparently attributed to him involving real estate transactions involving the defendant. Had he ever loaned $3 million to facilitate a real estate transaction brought to him by his cousin? Tuttle laughed as he said, “No.”
Had he ever loaned $1.9 million to McDonald’s Da Boys LLC real estate company? This one drew a somewhat nasally laugh accompanying his “No” response, leading to an apology to the court for snort-laughing his answer, which drew some sympathetic laughter from the jury.
Tuttle was also shown a “Death Settlement Agreement” with his name on it — “I’ve never seen this before in my life,” he testified. Another “No” followed a question about a $1.75-million loan on mortgages.
If I heard correctly, Tuttle estimated he currently had $29 in his savings account, leading to his level of amusement at the financial questions being asked of him, particularly his loaning large amounts of money to facilitate real estate transactions.
Tuttle did say, however, that a portion of paperwork regarding a Buck Mountain Road transaction sent to him attracted his attention enough that he asked his cousin George Hassenplug if he should sign it. He said he was told that he shouldn’t worry, that “the deal will fall through in a couple of months.” Asked if he was involved in a $1.95-million loan related to that sale, he again replied, “No.” It might be recalled that the Buck Mountain Road transaction involved another witness that day in court, William Vaught Jr. That transaction saw the sale and repurchase of that property at an approximate $600,000 loss to the buyer in under a month, as the deal apparently did “fall through,” as predicted by George Hassenplug to his cousin.
William Vaught Jr.’s testimony indicated he was told that ITFederal principal Truc “Curt” Tran was initially involved in that projected purchase but had later backed out. It is believed that the Aggravated Identity Theft federal charge against McDonald involves Tran’s assertion his name was forged in documents related to this real estate transaction. This reporter did not see Tran’s testimony due to his status as a pending witness at the time of that testimony.
Back to Tuttle’s direct examination, he was asked if he had ever received money from Jennifer McDonald. “No,” came his now familiar reply. Had he received $560,000 related to a Rileyville Road transaction? Once again, the answer was “No”.
Asked about his signature on a $1.075-million loan, Tuttle replied that he did not believe it was his. He observed that he “wrote a lot neater” than the signature on the document. He added that it was possible it was his signature, but he doubted it and did not recall signing that document.
Near the end of his direct examination, Tuttle was asked if he’d ever received money for his willingness to put his signature on the documents sent to him by his cousin. “No,” he replied. How about “gifts?” came the follow-up question, to which he responded in the positive, citing what he estimated as a $10 T-shirt sent to him. That led to the prosecution’s introduction of Exhibit 534, a photo of that T-shirt which had “That’s Mr. Tuttle” and letters appearing to be “COTB.” Asked the meaning of the T-shirt lettering, Tuttle said he was told it meant “Taking Care Of Business or something to that effect.”
On a brief cross-examination, the defense raised the specter of a Little League baseball game he had attended at which he had been asked to leave by an umpire after questioning ball and strike calls involving a nephew. The “That’s Mr. Tuttle” on the T-shirt was a reference to his responding, “That’s Mr. Tuttle to you,” to the umpire, defense counsel asserted. Tuttle said he had been asked to leave the game but denied that he had responded, “That’s Mr. Tuttle to you,” to the umpire.
And with that and a brief re-direct examination to clarify a date on one of the documents shown him, Larry Tuttle Sr.’s turn at the plate, I mean on the witness stand, ended.
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.