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EDA Attorney accuses former executive director of forging document

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Nothing’s changed from yesterday – the Warren County Courthouse continues to see a lot of action surrounding the alleged misappropriation of EDA assets. Royal Examiner File Photo/Roger Bianchini

A bombshell dropped on the second day of motions hearings on the freezing of defendant assets in the Front Royal-Warren County Economic Development Authority’s civil suit seeking recovery of a minimum total of $17.6 million from nine defendants. At the center of that recovery effort is former EDA Executive Director Jennifer McDonald and two of her real estate companies, among several people and Limited Liability Companies (LLC’s) tied to those people.

That bombshell was an accusation by EDA Attorney Dan Whitten that a defense exhibit presented on McDonald’s behalf indicating EDA Board of Directors approval of a 2016, $2-million dollar transfer to its executive director to enact a land purchase was a forgery.

“I think this is a fraudulent document produced by Ms. McDonald,” Whitten told McDonald attorney Jay McDannell as he was questioned about the defense exhibit. Whitten observed that the board resolution authorizing an apparent wire transfer of funds to McDonald’s control was ostensibly approved and signed in closed session.

Whitten noted that such a binding financial resolution cannot be approved and signed in closed session, as it would constitute a violation of Freedom of Information Act (FOIA) standards – “I was there and that did not happen in closed session … I believe this is a fictitious document created by Ms. McDonald,” Whitten told her attorney.

Dan Whitten, right, and Doug Stanley were both present in the WC Courthouse Thursday, May 30 – Whitten as a key witness in the EDA Civil litigation motions hearing; Stanley awaiting his turn with a crowded second floor lobby contingent, including supervisors Dan Murray Tony Carter, Archie Fox, Linda Glavis and Tom Sayre among others called to testify before the Special Grand Jury exploring potential criminality tied to the EDA civil litigation.

The “September 2016 – $2 million purchase” is cited in the civil complaint as one of McDonald’s unauthorized uses of EDA assets for personal gain. The complaint notes a check for $94,595 was drafted to McDonald real estate company DaBoyz LLC at the September 2016 closing with TLC Settlements.

Judge Clifford L. Athey Jr. overruled plaintiff counsel Cullen Seltzer’s objection to the document’s introduction as an exhibit following Whitten’s assertion of his skepticism about its validity.

“There are a lot of people on here who are alive to say whether it is real,” Athey observed of the signature list.

Following that ruling Seltzer asked the court to direct McDonald’s counsel to cite “exactly where” the document came from. After an initial hesitancy telling the judge he did not know the precise origin of the document, McDannell told the court “from my client – she gave me a pile of documents and it was in there with them.”

Whitten’s stunning assertion of a forged document introduced by defense counsel led to a flurry of activity during a subsequent recess, leading to a recalling of former EDA Board Chairman and Vice Chairman Greg Drescher and the contacting of other surviving members of the EDA Board of Directors whose signatures are on the resolution. Those members include current Vice-Chairman Bruce Drummond, former Treasurer William “Billy” Biggs and former members Ron Llewellyn and William Sealock, the latter now Front Royal’s vice mayor. Two other members whose names are on the document, then Chairman Patty Wines and Jim Eastham are deceased.

Plaintiff counsel said it would attempt to contact those surviving members during an adjournment in the hearing. Following that adjournment Seltzer told the court he had contacted the EDA members in question but they would only be able to testify that afternoon through a phoned-in connection to the courtroom.

At the closing of the day’s hearing shortly before 5 p.m. Judge Athey instructed plaintiff co-counsel Seltzer and Lee Byrd to produce Drummond, Llewellyn, Sealock and Biggs for testimony on the document at 9 a.m. Friday morning. Told Biggs had expressed concerns about appearing due to the problems walking he cited in resigning from the EDA board last year, as well as memory issues from a stroke suffered several years ago, Athey said he would work to accommodate Biggs’ condition and minimize the time he needed to spend at the courthouse Friday in urging the attorneys to try and convince him to appear.

From left, Ron Llewellyn, Greg Drescher and Jennifer McDonald at 2017 EDA board meeting. Drescher testified that prior to the launch of the September 2018 EDA audit the EDA board “had complete trust on information brought on a day-to-day basis” by their executive director. Llewellyn will testify on his degree of trust, among other things, Friday.

However Drescher was already on the witness list and was back in short order to testify as to his knowledge of the document. Athey ruled that plaintiff counsel could not discuss the disputed document with Drescher prior to his testimony.

After covering several other topics, McDonald’s counsel arrived at the Closed Session Resolution authorizing the $2-million transfer.

Like Whitten, Drescher said the document was the familiar EDA Resolution document.

“It looks like your signature,” McDannell observed.

“It does,” Drescher replied.

“Does that look like the way your write dates?”

“Yes.”

“Do you have any reason to doubt its authenticity,” McDannell asked Drescher.

That question led to a lengthy pause as Drescher perused the one-page resolution document – “No,” Drescher replied as he scratched his head and cast a tight-lipped look the plaintiff attorney’s way.

Seltzer revisited Drescher’s assessment on cross examination. He noted the “CONFIDENTIAL” designation on the document and its wording asserting the closed session resolution held the same legal weight as other board resolutions.

“I don’t recall that ever happening,” Drescher replied.

“Do you have any memory of this one,” Seltzer asked Drescher of the resolution in his hand.

“I don’t.”

“Do you recall the EDA board ever approving Ms. McDonald’s purchase of a $2.5 million dollar farm for Curt Tran?”

“I don’t,” Drescher answered.

Earlier defense argument and witness questioning indicated what was termed “the Buck Mountain” property purchases involving William Vaught Jr., McDonald’s DaBoyz LLC real estate company, and TLC Settlements closing company had been made as a potential site for an industrial farming operation for Front Royal Farms LLC, an entity created by ITFederal principal Truc “Curt” Tran. Tran and his ITFederal LLC are two other pivotal EDA civil suit defendants.

Asked if these additional factors altered his perception of the validity of the defense exhibit, Drescher said, “I guess I would, I don’t, I guess I would.”

The trust had yet to wane in June 2017 as Drescher and McDonald fielded tough questions about the workforce housing project at a joint work session with county supervisors.

The hearing reconvenes at 9 a.m. Friday in Warren County Circuit Court.

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Suspect found in woods and charged thanks to citizens’ help

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Richard Matthew Crouch / Photo courtesy of RSW Jail

On September 29, 2019, at approximately 2:26 pm, Warren County Sheriff’s Office Communication’s received information that wanted subject Richard Matthew Crouch was seen in the 2100 block of Strasburg Road. Deputies responded to the area, and upon arrival, citizens reported that the male had entered the woods. Deputies set up a perimeter and had a K-9 respond to the location. The K-9 track led deputies to Richard Matthew Crouch, and he was taken into custody without incident.

Crouch was transported to RSW Regional Jail and was held without bond on the following charges:

  • Strangle Another Causing Wounding OR Injury (x8)
  • Assault: On Family Member (x2)
  • Malicious Bodily Injury
  • Abduction: By force, ETC, To Deprive of Liberty
  • SCH I/II: POS W/INTNT TO MAN/SELL/DIST

The Warren County Sheriff’s Office would like to thank the citizens of our community for their help, as it was instrumental in the capture of this individual. Contact for this incident is Lieutenant Smoot at 540-635-4128 or via email at ltsmoot@warrencountysheriff.org.

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Suspects found and charged with Grand Larceny for theft of vehicle

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Derrick Aldine Malone and Dakota Leigh Free. Photos courtesy of RSW Jail.

On September 18, 2019, the Front Royal Police Department responded to the 800 block of John Marshall Highway for a reported larceny of a motor vehicle. The victim alleged that his 2005 Mitsubishi Lancer was stolen from the parking lot of 7-11 after leaving his vehicle running while he went into the store. Witnesses were interviewed on scene who advised they had observed two subjects, one male and one female, get into the vehicle and drive off.

A description of the vehicle and suspects were given to surrounding jurisdictions while the investigation continued. Detectives retrieved video footage from the 7-11 and confirmed witness statements.

On September 22, 2019, Front Royal Police Department received information that the stolen vehicle was possibly parked at the Hampton Inn in Front Royal. When Officers arrived, the vehicle was located parked in the back lot of the hotel and confirmed to be the stolen vehicle from earlier in the week. The vehicle was towed to the Front Royal Police Department to be processed and stored. The suspects were positively identified as Derrick Aldine Malone and Dakota Leigh Free, and both were detained without incident and charged with Grand Larceny for theft of the vehicle. Malone and Free are currently being held at the Rappahannock Shenandoah Warren Regional Jail without bond.

Anyone who has further information about this incident is asked to contact Detective D. Fogle at the Front Royal Police Department, Criminal Investigations Division at (540) 636-2208 or dfogle@frontroyalva.com.

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Harrisonburg woman pleads guilty to fatal overdose distribution

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HARRISONBURG, VIRGINIA – Iza Mar Rosario-Cruzado, 31, of Harrisonburg, Va., pleaded guilty yesterday in U.S. District Court to one count of distributing and possessing with the intent to distribute a mixture of heroin and fentanyl. Rosario-Cruzado further admitted her distribution of this drug mixture resulted in an overdose death. United States Attorney Thomas T. Cullen made the announcement following the defendant’s guilty plea.

“Heroin laced with fentanyl is driving the opioid epidemic that has ravaged our district for the last several years,” U.S. Attorney Cullen stated today. “We will continue to work closely with our state and local partners to investigate and prosecute cases involving overdose deaths and hold dealers accountable under federal law.”

“This sentence is a great example of our efforts to keep our local communities safe from the spread of drugs. Heroin and fentanyl are extremely deadly substances and those who spread this poison across our cities, acting with blatant disregard for the lives of the people who live here, will not be tolerated,” said Special Against in Charge Jesse R. Fong of the U.S. Drug Enforcement Administration, Washington Field Division. “This case is a testament to the hard work DEA and our law enforcement partners do every day to keep these dangerous drugs out of the hands of our loved ones.”

According to court documents entered during yesterday’s hearing, on December 13, 2017, victim M.J.M. was found deceased following a heroin and fentanyl overdose. Investigators determined that the day prior, December 12, 2017, Rosario-Cruzado distributed a mixture of heroin and fentanyl to Richard Mansfield. Mansfield subsequently redistributed the same drugs to M.J.M., who ingested them, resulting in his overdose death.

On September 12, 2018, Mansfield pleaded guilty to one count of distributing a mixture of heroin and fentanyl.

At sentencing, scheduled for December 17, 2019, Rosario-Cruzado faces between 12-16 years in years in federal prison, as agreed to as part of her plea agreement.

The investigation of the case was conducted by the Drug Enforcement Administration, Virginia State Police, and Harrisonburg Police Department, with the assistance of Rockingham County Commonwealth’s Attorney Marsha L. Garst. Assistant United States Attorney Jeb Terrien is prosecuting the case for the United States.

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Maryland man facing multiple charges after I-66 pursuit

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Jeremy M. Carr, 32, help without bond on multiple charges in the RSW jail. Photo courtesy of RSW Jail.

A Mechanicsville, Maryland man is behind bars for DUI and multiple other charges in three counties after he fled from law enforcement Friday (August 30, 2019).

Virginia State Police have charged Jeremy M. Carr, 32, in Warren, Fauquier, and Prince William counties with three counts reckless driving, three felony counts of eluding police, three counts driving on a suspended license, three counts of unauthorized use of an automobile, three counts of DUI, and three counts wearing a mask to conceal identity.

Also in Warren County, state police charged Carr with one felony count of hit-and-run, one count of failing to obey a traffic light, and one count of passing on a double-solid center line. In Prince William County, Carr was also charged with one count of passing on a double-solid center line.

State police initiated the traffic stop at approximately 7:57 a.m. as a 2010 Ford F-250 was traveling west on Interstate 66 at the 37 mile marker in Prince William County. The violation was for speeding – as the F-250 was driving 93 mph in a posted 70 mph zone.

The Ford continued west on I-66 and entered Fauquier County, reaching speeds of up to 100 mph. The Ford F-250 finally pulled over and stopped on Route 340 in Warren County. The driver, Carr, was taken into custody without further incident.

During the course of the pursuit in Warren County, the Ford did strike another vehicle. No one in that vehicle was injured.

No state police troopers were injured in the course of the pursuit.

Carr is being held at the Rappahannock-Shenandoah-Warren Regional Jail.

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McDonald and husband receive secured bonds on new EDA-related charges

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Above, Jennifer McDonald upon her booking on Aug. 23; below, Sammy North being booked into RSW about an hour before his wife. Photos RSW Jail website

After spending the weekend in jail, both Jennifer McDonald and her husband “Sammy” North received secured bonds from Judge Bruce D. Albertson late Monday morning. By 11:07 a.m. both were remanded to the custody of the Warren County Sheriff’s Office to be returned to Rappahannock-Shenandoah-Warren County Jail (RSW Jail) for processing out of the facility upon arrangement of the securing of their bonds.

McDonald and North joined Donald Poe in receiving bond from the court Monday morning. Poe was granted a $20,000 unsecured bond at a hearing convened at 8:45 a.m. He faces one new charge of money laundering.

$20,000 bond set for Poe; 10:30 a.m. hearing set for other 3 defendants

After hearing attorneys for the former EDA executive director and her spouse explain that the 14 new charges against her and three initial charges against her husband did, indeed, relate to the movement of money several years ago, Judge Albertson granted McDonald $25,000 secured bond on her new charges; and North a $10,000 secured bond on the three charges against him.
Albertson said he expected both McDonald and North to be able to meet those new bonds. He ordered neither to have contact with other EDA defendants, other than each other since they live together as husband and wife.

It became clear during the 10:30 a.m. video hearing with Judge Albertson from Harrisonburg at his home base court, that all the sealed special grand jury indictments against McDonald, North, William Lambert and Donald Poe handed down at the end of last week were new charges related to old transactions believed to involve embezzlement or the obtaining of EDA assets through false pretenses.

Donald Poe being processed into RSW on Aug. 23

Layton’s 8:45 a.m. bond hearing comment about the additional risk of flight stemming from the 14 new charges against McDonald related to the addition of what he estimated at as much as $800,000 of additional EDA assets being moved around 2017. He told the court those transactions involved obtaining wetland credits. Judge Albertson noted that in his first consideration of bond for McDonald, an amount of about $3 million in allegedly misdirected EDA assets was cited by the commonwealth, which was again represented by Bryan Layton.

In fact one conversation between Layton and the judge indicated that McDonald could be facing as much as 40 years in prison and up to $500,000 in fines on charges now faced.

Attorney comments indicated the charges against North involve a real estate transaction dating to August 21, 2015. While that transaction is believed to have involved illegally-obtained EDA assets, it was observed by McDonald’s attorney that the involved real estate was not EDA property.

It was also noted that an April 11, 2019 date tied to some of the new charges against McDonald, was supposed to read April 11, 2017.

Defense attorneys Peter Greenspun (McDonald), Frank Reynolds (North) and William Ashwell (Poe) all told the court that when their clients were informed of the new indictments Friday, they voluntarily turned themselves in at the RSW Jail.

“He went to RSW at approximately the same time as his wife, I don’t know if they went down together,” North’s attorney Reynolds told the court. Reynolds also turned his client’s passport over to the court as a proffer for bond for North.

According to Greenspun McDonald waited several hours for law enforcement to arrive to provide the paperwork for her to be processed into jail. He said she arrived at the jail around 3 p.m. As reported on Friday McDonald was processed into RSW at 6:22 p.m., about an hour after her husband. Poe was booked about 10 minutes after McDonald early Friday evening.

All defense attorneys pointed to their clients’ family and business ties to the community in arguing for bond. About a dozen Poe family members were present, including son Jason who is running for Warren County Sheriff as the County Republican Committee nominee. Three McDonald family members were present, including her mother and aunt.

McDonald was initially arrested on May 24 and twice denied bond by Judge Clifford L. Athey as a potential flight risk. Chief 26th District Judge Albertson took over EDA criminal cases after Athey withdrew to prepare for his elevation to the Virginia State Appeals Court. However Athey has continued to preside over the Warren County Special Grand Jury empanelled to investigate potential criminality tied to the EDA financial fraud investigation. Albertson indicated he would soon be naming a replacement judge for the special grand jury as Athey’s move to the State Appeals Court next month nears. Albertson also said that appointment would not be him.

Citing the special grand jury pattern of Friday indictments and its six-month extension to continue to receive evidence, Greenspun requested the court to allow his client to simply have a hearing date set on any further charges she may face, rather than continue to face weekends in jail on repetitive and interrelated charges.

While appreciating the defense argument, Albertson said he felt the newly-appointed special grand jury judge, when seated, should be allowed to make a decision on grand jury indictment processes, rather than him as the presiding criminal case judge.

McDonald was released on bond from her initial incarceration on what grew from eight to 14 charges while she was jailed for the most part in the Fairfax Adult Detention Center, on a $50,000 secured bond on July 31. Poe, initially arrested on three charges July 23, was also released on bond by Albertson on July 31.

The other EDA criminal defendant, Michelle “Missy” Henry was released on bond July 23 after twice having bond hearing delayed due to judge availability. Henry was arrested on June 24 on two felony counts related to disbursement of B&G Goods’ assets.

Of the four people arrested Friday related to the Front Royal-Warren County Economic Development Authority financial fraud investigation, only William Lambert remains jailed. Former B&G Goods registered agent and co-owner Lambert was the final of the four EDA-related defendants to appear in court Friday morning, and the only one to appear without counsel.

With no assets other than a 1994 truck to his name, Judge Albertson ruled Lambert at least temporarily qualified for court-appointed counsel. The judge set a return hearing date for Friday, August 30 at 9 a.m. for Lambert to appear with an attorney from the Public Defender’s Office. However from the judge’s comments, it appeared Lambert’s new counsel may only be seeking a bond hearing date at that time.

William Lambert following his Aug. 23 booking

Lambert, like North, was arrested Friday on two felony counts of Fraud – Obtaining Money by False Pretenses and one count of Money Laundering – Financial Transaction, proceeds from known felony activity. North and Lambert became the fourth and fifth people indicted related to the Cherry Bekaert EDA financial fraud investigation and consequent civil litigation on behalf of the EDA.

That litigation filed March 26 sought recovery of $17.6 million of EDA assets, an amount now up around $21 million.

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$20,000 bond set for Poe; 10:30 a.m. hearing set for other 3 defendants

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Donald Poe

Some legal frustration was apparent Monday morning during an 8:45 a.m. video bond hearing related to the four EDA financial scandal arrests on Friday. That frustration was most apparent in Jennifer McDonald attorney Peter Greenspun, who had driven here from Fairfax, following Judge Bruce D. Albertson’s ruling on the bond request by Donald F. Poe’s attorney William Ashwell.

Albertson granted a $20,000 unsecured bond to Poe on the one new charge he was arrested on Friday, August 23. Albertson set a $20,000 secured bond for Poe on three earlier charges on July 31, the same day he granted a $50,000 secured bond to McDonald. Poe had been jailed a week, McDonald for two months at the time.

Poe was present in court for the 8:45 a.m. video hearing with the Harrisonburg-based Albertson who was preparing for his own court docket. About 11 Poe family members, including son Jason, were present for the hearing.

The Fairfax-based Greenspun bemoaned the pattern of Friday afternoon indictments stemming from the EDA Special Grand Jury investigation into potential criminality tied to the EDA civil litigation seeking the return of approximately $20 million in alleged embezzled or misdirected EDA assets. He was also frustrated that his client did not have a bond hearing on the Warren County Circuit Court docket to coincide with Poe’s.

Assistant Commonwealth’s Attorney Bryan Layton told Judge Albertson that in addition to the single new charge against Poe, there were multiple new charges against McDonald that primarily related to previous charges against her.

Jennifer McDonald

However, there was reference to one new charge the prosecution indicated the potential of money “being siphoned off” that could impact an increased risk of flight by defendant McDonald.

Albertson acquiesced to Greenspun’s request for a bond ruling prior to the defense attorney’s planned trip out of country on Thursday.

“It won’t be pretty,” the judge said in setting a 10:30 a.m. continuation of the bond hearing for McDonald. Albertson acknowledged that Warren County Circuit Court Judge William Sharp also had a docket Monday morning – but that he would do what he could to accommodate the defense requests for a ruling today.

McDonald’s husband Sammy North’s attorney Frank Reynolds also asked that his client be considered for bond at that time. It was not clear whether the fourth person arrested Friday, former B&G Goods principal William Lambert yet had counsel to represent him at 10:30 a.m.

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