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County Supervisors removal petition filed with 941 signatures

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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.

Maureen Schofield of Front Royal greeted Warren County BOS members at their Tuesday meeting on October 15. Photo by Kim Riley


 

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.

Vexatious litigation?

“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.

Photo accompanying Royal Examiner’s early February 2018 story where Jennifer McDonald alleged about $2 million in Hollywood Casino slot machine winnings over a three-year period with no more than $18,000 of her or house money being invested to achieve those winnings. State Police have estimated McDonald lost $750,000 including her winnings; some contend those losses could be even higher.

 

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.

Above, the initially-submitted plan for an approximate 26,000 s.f. ITFederal building number one, of three promised; below the reality, a 10,000 s.f. building meeting minimum EDA loan and EB-5 Visa requirements.

 

 

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.

 

Grand Jury indicts 14 County and EDA officials for lack of EDA oversight

Feds OK ‘Dollar Special’ on first Avtex property sale

Op-Ed: County, EDA officials cited for failed oversight – why not the Town?

 

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,

v.

 

DANIEL J. MURRAY, THOMAS H. SAYRE, TONY F. CARTER, ARCHIE A. FOX, and LINDA GLAVIS,

Respondents.

 

 

 

 

Case No.:

 

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:

  1. 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.
  2. 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.

  1. 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.

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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
Shenandoah District 1,415
Happy Creek District 1,811
Fork District 1,541
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:

  1. 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;
  2. 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;
  3. Upon hearing sufficient evidence proven by a preponderance of the evidence, remove the Respondents from their positions in office; and
  4. Grant other and further relief as the Court deems just, proper, and equitable.

Dated: October 3, 2019                                  Respectfully submitted,

Berryville, Virginia

 

                                                                       

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

E: trjohnson@trjlegal.com

Counsel for Petitioners

  

VERIFICATION BY REPRESENTATIVE PETITIONERS

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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. 
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Crime/Court

EDA Board Chairman Jeff Browne reacts to July civil litigation results ordering total of over $13.35 million paid to the County Economic Development Authority

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As noted in our lead story on the “Warren Economic Development Authority” (EDA) versus Truc “Curt” Tran and his ITFederal LLC company civil liability case result (See: Jury awards WC EDA $11.9 million-plus in civil compensatory claims against ITFederal and Truc ‘Curt’ Tran), involved players on the plaintiff’s side deferred to current EDA Board Chairman Jeff Browne for a reaction, not only to the Tran/ITFederal result, but a month in which four civil liability cases went the EDA’s way. After a day of reflection on this month’s civil liability trials, much of which he watched in the courtroom, often with other EDA board members, this is what Browne told Royal Examiner:

“As part of the Jennifer McDonald lawsuits, the EDA successfully sued six defendants this month in four civil jury trials and was awarded about $13 million in compensatory damages, $400,000 in punitive damages, and $75,000 in damages for statutory conspiracy. There will be additional civil trials in March 2023.

“The EDA’s main responsibility in these lawsuits is to recover assets that rightfully belong to the EDA and ultimately to the residents of Warren County. It’s a work in progress, but I’m pleased with the outcomes. Every defendant was found liable on multiple charges. Every defendant has to pay. A jury found that the EDA Board of Directors with oversight responsibility of Jennifer McDonald wasn’t negligent in retaining her as it took immediate steps after finding solid evidence of her misbehavior.

EDA Board Chairman Jeff Browne, left, and former EDA and County Attorney Dan Whitten at a Sept. 2019 EDA meeting. Royal Examiner Photos Roger Bianchini


“But that isn’t the whole story. Members of the EDA Board were present on every day of every trial. We were impressed with the juries and Judge Albertson. Jury members listened attentively, took notes, and showed in their verdicts that they had a command of the facts in each case. Judge Albertson was fair to both sides of each case and did a good job of managing each trial. Prior members of the EDA Board, prior staff EDA members, a former county administrator, and former members of the Warren County Board of Supervisors all stepped up to testify and do their civic duty. We can be proud that our judicial system still works.

“The criminal process moves forward in other venues. In the meantime, some measure of justice is present in the jury verdicts in Warren County this month. For that, we are grateful.”

Coupled with the out-of-court “no-fault” settlement agreement with McDonald for an estimated $9 million in real estate assets, the courts have now ordered the return of $22 million to $23 million in assets to the EDA. At various points in the investigation into alleged embezzlement and misdirection of EDA assets between 2014 and 2018, the total involved amount has been cited from $21 million to $26 million. There have been significant legal fees involved, perhaps $6 million or more. But in the wake of this month’s results, it appears the EDA’s contracted civil counsel from the Sands Anderson law firm of Richmond are earning that money.

Asked for a reaction to the verdict, Tran and his attorney Gregory Melus declined comment. As noted in the above linked story on the verdict, Melus notified the court of his intention to file a motion to overturn the verdict as not supported by the evidence presented at trial, as have the other three involved civil case defense attorneys.

The Sands Anderson legal team that culminated a successful 4-for-4 month of WC EDA civil liability trials ordering the return of a total of over $13.35-million in misdirected EDA assets from six defendants, including two companies named as co-defendants in the Poe and Tran trials. From left, the plaintiff legal team is paralegal Kimberly Paulsrud and attorneys Lee Byrd, Karissa Kaseorg, and Cullen Seltzer.

Click here to see the previous stories.

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Jury awards WC EDA $11.9 million-plus in civil compensatory claims against ITFederal and Truc ‘Curt’ Tran

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After five hours of deliberation beginning shortly after 9 a.m., at 3:30 p.m. Thursday afternoon, July 28, a Warren County Circuit Court civil case jury awarded the “Warren Economic Development Authority” (aka EDA, WC EDA, FR-WC EDA) a total of $11,919,313.38, plus some interest payments from defendants Truc “Curt” Tran and his ITFederal LLC company. The finding of liability against the defendants related to exchanges of money for Tran and ITFederals’ plan to develop a 30-acre parcel at the 148-acre Royal Phoenix Business Park portion of the former Avtex Superfund site in Front Royal. That seven-person civil case jury also dismissed all counterclaims by co-defendants Tran and ITFederal related to breach of contract and surrounding claims against the EDA.

However, the jury did not find the defendants liable on claims of Conspiracy and Fraud that could have led to significant punitive damages up to $350,000, or as high as triple the compensatory claim of $11.9 million if found guilty of statutory conspiracy indicating malice against the plaintiff. Tran was found liable on claims of Conversion, Unjust Enrichment, and Ultra Vires, the latter actions outside the authority of involved officials. ITFederal was found liable on claims Conversion, Unjust Enrichment, Ultra Vires, and Breach of Contract.

The breakdown of liability of the defendants was $1,499,986 against Tran, plus 3-1/4 years of interest on that amount accumulated since the March 2019 filing of the EDA civil actions against defendants alleged to have worked with former EDA Executive Director Jennifer McDonald between 2014 and 2018 to defraud the EDA out of an estimated $21-million. The $11.9-million claim of compensatory damages against Tran and ITFederal was the largest single portion of the EDA civil liability actions for recovery of lost assets. With approval of a bankruptcy court judge, McDonald settled EDA claims against her in an out-of-court “no-fault” settlement for what was cited as $9 million in real estate assets.

Truc ‘Curt’ Tran was not smiling after Thursday’s jury verdict finding him personally liable for $1.49-million and his ITFederal company liable for another $10.4-million surrounding the EDA’s $10-million loan for the aborted Avtex 30-acre, Lot 6 ‘Brownfield’ redevelopment project. Testimony during the four-day trial indicated suspicions began compounding about then EDA Executive Director Jennifer McDonald’s, below, financial transactions following publication of a February 2018 Royal Examiner story on alleged slot machine winnings claimed to have provided the cash for a number of her personal real estate transactions.


As noted at the time of publication a week later: January 2018 Royal Examiner file photo of Jennifer McDonald in her EDA office displaying tax receipts she said indicated winnings at Charles Town’s Hollywood Casino. Coincidentally, the blue star on her chair is the logo of her favorite football team, the Dallas Cowboys from whom the real estate LLC ‘DaBoyz’ name was taken.

From testimony over four days of trial in the Tran/ITFederal liability case that $1.499-million finding against Tran related to EDA payments made to Tran under the pretense it was front money that would be reimbursed to the EDA by a $1.5 million Virginia Economic Development Partnership (VEDP) grant that was never acquired, or even applied for.

The finding of liability for $10,419,327.38 against ITFederal revolved around the $8,419,327.38 balance of a $10-million loan/promissory note the EDA gave the company to begin development of the ITFederal parcel behind the EDA offices in the old Avtex Administration building off Kendrick Lane. As noted in previous stories (see LINKS at end of story) on testimony and evidence presented during the trial, ITFederal was presented to the EDA Board of Directors in 2015-16 by then Sixth District Congressman Robert Goodlatte as not really needing the loan. Past EDA board members Greg Drescher and Ron Llewellyn testified that Goodlatte suggested the loan as a public relations move to illustrate Virginia’s positive work with the private sector to redevelop a former federal Superfund “brownfield” site.

Consequently, despite the written-in 30-year payback loan term, EDA officials believed it was actually being done as a short-term public relations effort, and would be paid back in a matter of months when what they believed was an existing $140-million ITFederal contract with the Nuclear Regulatory Commission (NRC) kicked in. A McDonald representation to her board that Tran would become an “anonymous donor” of $8-million to a proposed Criminal Justice Academy project then being worked on by the EDA, was seen as the start of that early repayment, the former EDA board members testified.

It appears this civil case jury, as three before it this month, have rejected a defense theory of the case asserting that the defendants were unwitting victims of McDonald’s alleged lies concerning the movement of EDA assets, just as the EDA was victimized. Plaintiff attorneys from the Sands Anderson law firm of Richmond, Va., countered those arguments by asking the jury to “follow the money” to see who benefited from the misinformation they allege McDonald was giving the EDA board, as well as EDA auditors.

During the previous morning session on Wednesday, the two sides presented their final witnesses: for the defense Mark Viola, proprietor of Viola Engineering, who did geo-technical work for Tran on the ITFederal site regarding construction delays related to underground discoveries of old utility piping and substances; and in plaintiff rebuttal to some of the previous day’s defense assertions, former County and EDA attorney Dan Whitten.

Late Wednesday, the court heard motions from both sides to strike the opposition claims against their clients. After listening to extensive arguments from both sides, Judge Albertson denied all motions to strike claims by either side, preferring as he has reviewing similar motions in earlier EDA civil liability cases this month, to allow the jury to make the decision on the substance of each sides’ claims against the other. After adjourning to dinner of pizza ordered to the courthouse for them around 7 p.m., the jury returned at 7:25 p.m. to say they preferred to go home and begin deliberations Thursday morning, which Judge Albertson agreed to.

Early Wednesday evening the EDA vs. Tran/ITFederal civil case jury told the court they preferred to begin deliberations the next morning, rather than into the evening hours that night.

As the three previous defense attorneys have following findings in the EDA’s favor this month, Tran/ITFederal counsel Gregory Melus notified the court he would file a motion to overturn the jury verdict. Those motions appear based on a defense contention evidence produced at trial was inadequate to justify conviction. A 30/30/10 day filing and response time schedule was set, though plaintiff counsel indicated if Melus needed additional time due to scheduling conflicts, that would not be a problem.

With motions to overturn on the table, counsel for both sides declined comment following Thursday’s verdict. Current EDA Board Chairman Jeff Browne, who observed much of the trial along with board members Jim Wolfe, Scott Jenkins, and Greg Harold, indicated that after speaking with counsel and some consideration he might have a response for the media shortly. See that EDA response in related story posted when available.

Click here to see the previous stories.

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EDA civil liability defendant ‘Curt’ Tran on witness stand for over 4-1/2 hours as trial heads into final day

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Tuesday, July 26, the third day of the “Warren Economic Development Authority” versus Truc “Curt” Tran and ITFederal LLC civil liability and counter-suit case was highlighted by the defendant’s 4-hours-and-37-minutes on the witness stand. That time started with a 2-hour-25-minute near monologue on direct examination, followed by 1-hour-58-minutes of sometimes contentious cross-examination by EDA co-counsel Lee Byrd and a fortuitously briefer 14 minutes of redirect examination by defense attorney Gregory Melus. On direct examination, Tran recounted his life story, beginning as an 11-to-12-year-old refugee to America in the wake of the Vietnam War and the fall of Saigon, leading into his work in data storage with the federal government and private sector, culminating with his efforts to develop a federally funded data center and import/export business in Front Royal and Warren County.

During that direct examination, Tran managed to recount a series of circumstances involving not only former EDA Executive Director Jennifer McDonald and a lack of supervisory EDA Board of Directors oversight of McDonald, but also shifting federal program guidelines, former President Barack Obama, and failed 2016 presidential candidate Hillary Clinton among reasons his projects here failed. The latter two involved a failure of the federal government during Obama’s presidential tenure to sign into law the Trans-Pacific Partnership (TPP), an international trade agreement that might have helped facilitate the import-export business Tran had hoped to create with his ITFederal company involving the cattle farm production of beef on acreage purchased off Happy Creek Road.

‘Curt’ Tran on site in front of his controversial reduced size ITFederal building as seen from the EDA office parking lot on Dec. 20, 2018, the day Jennifer McDonald resigned as EDA executive director under mounting scrutiny from her board of directors. Testimony from then-EDA board member Ron Llewellyn indicated Tran had lobbied for McDonald to retain her job at that time.

During a sometimes explosive cross-examination, Tran conditionally insinuated that several previous witnesses may have perjured themselves during testimony regarding circumstances of his agreements on the ITFederal project. Those witnesses in the defendant’s crosshairs of scrutiny included former EDA and County Attorney Dan Whitten, former EDA board member Ron Llewellyn, and Virginia Economic Development Partnership (VEDP) official Debbie Melvin.


In fact, Tran appeared to flirt with accusing former U.S. 6th District of Virginia Congressman Robert Goodlatte of, if not perjury, since he was not called as a witness for either side, but potential past lying were testimony from other witnesses, including Whitten, Llewellyn, and Greg Drescher, to be proven true regarding Goodlatte’s lobbying for Tran/ITFederal to receive the $10-million EDA loan for the Avtex site ITFederal project on a short-term basis as a positive public relations initiative for Virginia.

“I never say short-term, I didn’t say that – did he say that?” Tran wondered of multiple witnesses saying Goodlatte presented the $10-million dollar loan for the ITFederal project as a public relations effort to attract more business interest in Virginia rather than a loan Tran and his company actually needed to achieve their planned Avtex site federal data center development. With one defense witness remaining to be called Wednesday, one might wish Goodlatte was that witness to address that question, though he has not appeared on a prospective witness list.

The jury is expected to go to deliberations in the EDA vs. ‘Curt’ Tran/ITFederal civil liability case this afternoon, Wednesday, July 27.

Prior to sending the jury home at 7:02 p.m. Tuesday, Judge Bruce D. Albertson told that jury he anticipated deliberations to be handed over to them no later than early-to-mid-afternoon on Wednesday. Those deliberations involve an EDA base compensatory damage claim of over $ 11 million against Tran/ITFederal, as well as potential punitive damages up to $300,000 or more were the jury to find Tran and his company guilty of statutory conspiracy to defraud the EDA out of assets obtained under alleged fraudulent circumstances. Testimony indicated the defendants’ counterclaim at a base of approximately $4 million, with more at stake punitively as well.

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EDA in Focus

EDA vs. Tran/ITFederal civil liability and counterclaim trial heads into third day with defense poised to call final series of witnesses

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On Monday, July 25, the plaintiff “Warren Economic Development Authority” (aka EDA, WC EDA, FR-WC EDA) completed presentation of its case for liability for both compensatory and punitive damages during the morning session of its case against Truc “Curt” Tran and his ITFederal LLC company. Plaintiff counsel from the Sands Anderson law firm of Richmond, Virginia, called one witness after opening the day’s evidence with edited video of portions of two depositions they took from Tran, the first on October 8, 2021, the second three weeks later on November 1, 2021.

Both Tran’s responses to questions by plaintiff counsel at deposition and the testimony of the fourth and final plaintiff witness, former EDA Board of Directors member, Chairman, and Warren County Public Schools Superintendent Greg Drescher were presented to further the EDA contention Tran was an active participant and co-conspirator with former EDA Executive Director Jennifer McDonald in an effort to defraud the EDA into believing he had the means for follow through on promised development of 30 acres at the 147-acre Royal Phoenix portion of the former Avtex Superfund site. Primary among that fraudulent behavior according to the EDA theory of the case was the assertion ITFederal had secured a $140-million contract with the federal Nuclear Regulatory Commission (NRC), as well as accessing a Virginia Economic Development Partnership (VEDP) grant related to job creation. Evidence indicated neither was true.

Drescher reiterated testimony from former EDA attorney Dan Whitten on the trial’s first day last Friday concerning former U.S. Virginia Sixth District Representative Robert “Bob” Goodlatte’s efforts to justify a $10-million loan to Tran and ITFederal as a positive public relations move, despite his assertion that Tran and his company didn’t really need the loan. Drescher added that due to the nature of how the loan was presented as a show of cooperation between Virginia EDA’s and the private sector, he had believed the money would be returned to the EDA in a number of months, rather than years. That belief led to acceptance of the idea brought to the EDA board by its executive director that Tran would be an “anonymous donor” in development of a police training academy to the tune of $8 million dollars that then-Sheriff Daniel McEathron was interested in developing here.

However, defense counsel Gregory Melus pointed out to Drescher on cross examination that the terms of the EDA-financed $10-million loan to Tran clearly states that the loan had a 30-year payback term written into it. During a 55-minute cross examination, Melus repeatedly pressed Drescher on the lack of oversight provided by the EDA Board of Directors that he claims made his client a victim, rather than a player in any conspiracy alleged by the EDA regarding the failed promises of development creating as many as 600 quality jobs related to a government contracted data center on the 30-acre ITFederal parcel at Avtex.


ITFederal fell short of its promise of a federally funded data center producing some 600 jobs, by 600 jobs and about 18,000 s.f. of building.

That fact, among other shortcomings he cited in direct evidence against his client, led Melus to move to strike the plaintiff’s case on the majority of claims against Tran and his company following the resting of the EDA case. However, after hearing both sides arguments in that regard, Judge Bruce D. Albertson overruled the defense motion to strike the plaintiff claims against Tran and his company. As it has in this month’s previous EDA civil liability trials, the court expressed the opinion that the plaintiff evidence presented was sufficient to let the jury decide on its weight, rather than the court midway thru the trial.

With the case thrown to it, the defense opened its witness testimony with a financial investor in ITFederal’s parent company American Commonwealth Regional Center (ACRC). Quincy Zhao testified that he invested $100,000 in ACRC due to its economic development plans related to the EB-5 Visa Program. The program, as previously noted, encourages foreign nationals investment in economic development in the U.S. in exchange for green cards for investor’s families. Zhao explained that wealthy investors from the four primary nations invested in the program, China, Vietnam, India, and Korea (he did not note a north or south), among others, often used the program to educate their children in America’s school system, particularly at the higher educational levels. Zhao noted that eventually Front Royal-Warren County were ruled ineligible to qualify for the EB-5 Visa Program, creating issues with ACRC and ITFederal being able to fund the project. The EB-5 Visa funding was believed still on the table when Goodlatte made his initial assertions to the EDA board about the viability of ITFederal to be a major job creator for this community.

File photo of then Va. 6th District Congressman Robert ‘Bob’ Goodlatte on a visit to Warren County. Goodlatte was an early champion of the promised ITFederal development at the former Avtex Superfund site.

Former County and EDA attorney Blair Mitchell was the defense’s second witness, first of two successive by remote hook up. Mitchell, Dan Whittens predecessor, was queried on his knowledge of difficulties in marketing redevelopment of the Avtex property as a developmentally limited, federal Superfund environmental reclamation project, compared to other EDA industrial and commercial properties. Having retired in April 2016, he was also questioned on his knowledge of McDonald’s work as EDA executive director and the EDA’s recruiting of ITFederal as the first commercial development project at the Avtex site.

In response to a question about whether McDonald or anyone with ITFederal had qualified the NRC $140-million contract as an IDIQ (Indefinite Delivery Indefinite Quantity) federal contract, Mitchell replied, “No”. As plaintiff counsel has pointed out the IDIQ contract simply qualifies a company to bid on future federal contracts, guaranteeing nothing. In Tran’s second deposition video, asked about ACRC’s actual financial benefit from the $140 million NRC IDIQ contract, Tran replied $5,000. However, defense counsel has pointed to notations of “IDIQ” in some documents related to the ITFederal proposal to the EDA on Avtex Lot 6.

The defense’s second remote hook-up witness was James I. Marasco. After reviewing records of the EDA between 2014-17/18, from his home base in Rochester, New York, Marasco supported the defense contention that during that time period the EDA had very poor financial oversight and safeguards in place to prevent the type of financial misdeeds McDonald has been accused of. Marasco’s particular field of expertise is forensic auditing, he noted during direct examination.

A busy month on the EDA civil liability front is drawing to a close this week in the Warren County Courthouse.

Before dismissing the jury shortly after 5 p.m., Judge Albertson told them to expect to be in court later on Tuesday, to 6 p.m. or longer, despite the fact the case is still proceeding ahead of schedule. Due to a trip out of state for a real estate closing, final plaintiff witness and former EDA board member Ron Llewellyn is likely to open testimony at the trial on Tuesday prior to the defense calling its last series of witnesses, including defendant Truc “Curt” Tran. Defense counsel Melus has pointed out to the jury his client is not running away from questions about his role in the aborted ITFederal project at Avtex, as McDonald did in invoking her 5th Amendment right not to respond to questions at risk of self-incrimination during earlier testimony as a plaintiff witness.

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Crime/Court

First day of $11-million EDA vs. ‘Curt’ Tran civil liability trial concludes

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Following opening arguments and the start of the plaintiff’s case, including presentation of its paper trail of nearly 50 Exhibits, we counted 48, it contends will illustrate Truc “Curt” Tran was not an unwitting but active accomplice of former “Warren Economic Development Authority” Executive Director Jennifer McDonald in acquiring a total of $11,913,308 in EDA loans and payments under false pretenses, a Warren County Circuit Court civil case jury was released for the weekend at 4:23 p.m. Friday afternoon, July 22. Attorneys, the media, and a few observers followed the jury out of the courtroom and courthouse two minutes later.

Lead EDA attorney Cullen Seltzer, staff and co-counsel are dealing with an even longer paper trail in the Tran/ITFed case than they did in the Poe/ERE case, which they are pictured leaving the courthouse during, here.

The evidentiary portion of the plaintiff’s case, which included its first three witnesses, hit a snag when lead EDA attorney Cullen Seltzer announced the plaintiff’s next evidence, a video of portions of a deposition interview of defendant “Curt” Tran. Defense counsel Gregory Melus objected to the introduction of that evidence. After the jury was sent out of the courtroom, Melus told the court he had not had time to review the video, having only seen a transcript of those sections of the deposition of Tran by plaintiff counsel. He also objected to the video being introduced, as opposed to the text of the deposition which the plaintiff had originally sent him.

After hearing from both sides, Judge Bruce D. Albertson overruled the defense objection to introduction of the video, but offered to recess the trial to Monday to allow Tran’s attorney to review the estimated hour-long video. Subsequent discussion with counsel indicated the plaintiff may complete presentation of its case Monday. Asked by the court if he was able to open his case at some point Monday, could he complete it by Wednesday, Melus replied in the affirmative. With that positive time-frame looming, if possibly with some longer days to achieve it early in the week, Judge Albertson allowed the perhaps unexpectedly early adjournment on the trials opening day. With the jury dismissed with instructions to avoid discussion, media or social media accounts of the case, and no further matters for consideration by the attorneys, court was recessed at 4:25 p.m. until 9 a.m. Monday.


The month’s final EDA civil liability trial in the Warren County Courthouse is the largest one claims wise.

Prior to that adjournment, in addition to introduction of its paper trail, EDA attorneys called three witnesses. They were in order of appearance, former Warren County and EDA attorney Dan Whitten, Virginia Economic Development Partnership (VEDP) Assistant Director of Accounts Solutions Debbie Melvin, and Jennifer McDonald. Whitten was on the stand for over three hours, 1-hour-38-minutes on direct, and 1-hour-43-minutes on cross examination as counsel for both sides attempted to paint their contrasting evidentiary “roadmaps” of the case.

And as in the three earlier EDA civil liability trials this month, those contrasting “roadmaps”, or theories of the case, revolve around whether defendants were, pick one:

1 – Like the EDA itself, lied to and taken in by McDonald misrepresentations, and victimized themselves due to the EDA’s inability to provide adequate oversight of the alleged criminal actions of its executive director, or:

2 – Were willing participants in individual portions of the series of schemes McDonald is alleged to have hatched between 2014 and 2018 to defraud the EDA out of as much as $21 million dollars in assets to her own, and the benefit of others willing to provide needed “outside” the EDA co-conspirators.

The base compensatory claim of $11.9-plus million against Tran and his ITFederal LLC company is the largest in the EDA’s series of civil liability cases; and Tran has also filed a counterclaim for damages from a lack of EDA oversight of their former executive director. That former director McDonald made an out-of-court “no-fault” settlement for about $9 million in largely real estate assets in the EDA civil claim case against her in the wake of her bankruptcy filing. The only other million-dollar-plus jury award came last week when Donald Poe and his Earthright Energy Solar (ERE) were found liable for a base compensatory claim of $945,000, coupled with combined punitive damages against the two defendants totaling about another $300,000. All attorneys in the earlier civil trial cases have indicated they will file motions to overturn the verdicts based on a contention of inefficient evidence to convict.

File photo of former County and EDA attorney Dan Whitten, right at EDA board meeting prior to his departure for Prince George County attorneys job. Whitten pulled a marathon 3-hours-plus on the stand Friday.

Testimony by former EDA and County counsel Dan Whitten in the plaintiff’s case Friday noted former U.S. Sixth District of Virginia Congressman Robert Goodlatte’s championing of Tran and ITFederal as an economic development opportunity here at the former Avtex Superfund environmental remediation site. Whitten testified that both McDonald and Goodlatte presented Tran as a successful Northern Virginia businessman, with a $140-million federal government contract with the Nuclear Regulatory Commission as the basis for his planned Data Center development based out of a 28,000 square foot building on a 30-acre parcel at the Avtex/Royal Phoenix Business Park. However, it turned out that federal contract was an “IDIQ” (Indefinite Demand Indefinite Quantity) that essentially puts one in a position to bid on coming government contracts, rather than any guarantee of a contract.

The Goodlatte-championed ITFederal project also suffered financially when it didn’t qualify as an EB-5 Visa project. Whitten noted the EB-5 program was utilized nationally to encourage foreign investment in the millions in local economic development projects in the U.S. in return for “green cards” and family access to U.S. citizenship. Not testified to was the fact that the program has a rather notorious reputation for not usually realizing exactly what was promised in the way of financial support at the outset.

Whitten testified that Goodlatte had suggested the $10-million loan to ITFederal and Tran to illustrate to the media and public a working cooperative relationship between a local municipal EDA and the private sector. Whitten said that Goodlatte even said that Tran didn’t really “need” the loan, but that it would be a good public relations effort. Whitten testified that the EDA had anticipated that the loan would be short-term as more of a public relations effort, than an actual business loan. That helped explain the EDA board’s acceptance of McDonald’s representation that Tran was going to be an “anonymous investor” to the tune of $8 million in a planned Criminal Justice Academy project.

Responding to a question, Whitten also said Tran had never come to an EDA Board of Directors meeting during the ITFederal recruitment, proposal, loan acquisition, and planning process. In fact, he said he, as EDA counsel, had never previously met Tran.

‘Curt’ Tran pictured behind the EDA office on Dec. 20, 2018, the day Jennifer McDonald resigned by email under increasing pressure from her board. 

McDonald was on the stand a rather brief time compared to her previous EDA case appearances, three minutes for direct, and two minutes for cross examination. Asked about her interactions with Tran, and a false claim of VEDP grants for the ITFederal project at Avtex by EDA counsel, McDonald invoked her 5th Amendment right not respond at risk of self-incrimination a total of eight times. She added two 5th Amendment replies to cross examination questions, before defense attorney Melus cut his questioning off.

Plaintiff second witness Debbie Melvin testified that after one meeting with Tran in 2016, the Virginia Economic Development Partnership never received follow-up information sought from Tran about his company to verify its eligibility for a Virginia Jobs Investment Program grant, and that VEDP never authorized any grant funding for the ITFederal Avtex project or any Tran project in Warren County. Earlier Whitten testified that the EDA didn’t find out that paperwork indicating that grant was achieved had been forged, apparently by McDonald, until the EDA financial scandal investigation was underway in 2018-19.

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Crime/Court

Lambert found liable to EDA for $183,562 in compensatory and punitive damages

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After hearing an hour-and-45 minutes of direct and cross-examination of defendant William Lambert, as well as two hours of combined closing arguments by plaintiff and defense counsel Wednesday, July 20, a seven-person Warren County Circuit Court civil case jury took less than an hour, 45 minutes to be precise, to reach a verdict in Lambert’s civil liability case related to the “Warren Economic Development Authority” (EDA, WC EDA, FR-WC EDA) financial scandal.

That verdict was for the plaintiff EDA on all five claims of Fraud, Conversion, Conspiracy, Unjust Enrichment, and Ultra Vires; the latter, as regular readers now know after three EDA civil liability trials this month, a legal term for a public or business official overstepping their legal authority. The EDA was seeking $345,000 in compensatory damages, the total amount moved out of an EDA credit line account by former EDA Executive Director Jennifer McDonald in a 2014-15 home purchase and sale in which Lambert acted as a straw man in the purchase and sale of the 400 Craig Drive, Stephens City parcel. Two past EDA officials, former Administrative Assistant Gretchen Henderson and past board member Ron Llewellyn, both testified that there was no record of and no vote by the EDA Board of Directors to approve EDA involvement in the Stephens City home sale.

It continues to be a busy week at the WC Courthouse as the EDA civil liability cases roll toward a conclusion with a scheduled 6-day trial following Thursday’s jury selection in the EDA vs. ‘Curt’ Tran and ITFederal $9-million compensatory damages case.

However, the jury awarded the EDA only $11,062.49 in compensatory damages. That was the total amount of three payments made directly to Lambert during the August 2014 to February 2015 purchase and resale of the Stephens City property done in his name as the initial purchaser and then owner-seller. Plaintiff attorney Cullen Seltzer pointed out that that purchase was made in Lambert’s name in 2014 for $320,000 and sold six months later for $270,000, a $50,000 loss.


“Who doesn’t care about a $50,000 loss in six months,” Seltzer asked rhetorically in closing arguments, suggesting an answer to the jury – someone consciously involved in a fraudulent transaction. During his testimony beginning shortly after 9:00 a.m. Wednesday morning, Lambert said his then-girlfriend, Kathy Butler, Jennifer McDonald’s sister, brought the proposition on the use of his name in her sister’s home sale transaction to him as an effort by McDonald to help an old college friend, Michele Bower, and her husband, sell a home she and her husband were “saddled with” after purchasing a home in Rockland in Warren County.

Lambert denied any knowledge that something untoward might be transpiring with McDonald illegally accessing EDA assets. However, as juries have been in the two earlier cases this month against defendants April Petty and Donald Poe, this jury appears to have found the paper trail presented by the plaintiff counsel convincing enough for a finding of liability. And with that finding, the jury imposed punitive damages of $172,500, particular to the claim of statutory conspiracy.

Following Judge Bruce D. Albertsons’ polling of the jury to determine a unanimous consensus and their dismissal by the court with thanks for their two days of attention and work, defense counsel Philip Griffin II told the court he would file a motion to set aside the verdict, particularly as to the punitive claim of statutory conspiracy and fraud. Griffin said he felt there had been no hard evidence presented indicating defendant’s actions related to “ill will, hatred, or spite,” as stated in the statute.

In fact, speaking to the media outside the courtroom, Griffin pointed to his client, noting he had previously had virtually no relationship with the EDA other than cutting some trees down on properties for them. During his time on the stand, Lambert noted one of his jobs was as a “logger.”

William Lambert photo from Facebook page

As he has in the earlier EDA civil liability trials, Judge Albertson set a time frame for motions related to setting the verdict aside. This one was for a 30/30/10-day turnaround, with 30 days for the defense motion filing, 30 days for a plaintiff response, and 10 days for filing of any additional material.

And next comes jury selection Thursday in the EDA versus Truc “Curt” Tran and ITFederal case, with that civil liability trial involving a compensatory claim of around $9 million slated to begin Friday morning, July 22, and continue through the following week.

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