Following an hour-and-a-half Closed Session Friday morning, November 15, the Front Royal-Warren County Economic Development Authority Board of Directors unanimously approved a motion to authorize litigation to sue Cornerstone, LP, LLC, its principals and affiliates to recover “EDA land improperly conveyed to Cornerstone without EDA authority or collect the full value of the conveyance and such other damages to the EDA”.
The land in question is the 3.5-acre Workforce Housing parcel sold to the Cornerstone group on November 28, 2018, at a price of $10 dollars.
After initially receiving the parcel as a $10 gift from the aunt and uncle of former EDA Executive Director Jennifer McDonald, local realtors Mr. and Mrs. Walter Campbell, the EDA Board agreed to purchase the property for $445,000 in April 2017 after missing a previously undisclosed developmental deadline that would have enabled the Campbells to pursue tax credit compensation for the gift of the land to a public purpose.
It is believed that Cornerstone, LP, LLC, is a branch of regional developer the Aikens Group. Aikens was cited by former EDA Executive Director McDonald as a behind-the-scenes, private sector player in the Workforce Housing financial riddle from its inception in late 2014.
When contacted in April about the transaction Gray Blanton, who signed the Deed of Sale to Cornerstone for the EDA as board chairman in November 2018, told Royal Examiner he had only seen the final signature page of the four page document. Blanton seconded the motion made by Greg Harold to authorize the litigation.
Local real estate attorney Joe Silek Jr., who represented the EDA due to the recusal of then EDA Attorney Dan Whitten for a potential conflict of interest as EDA and County Attorneys, told us in April there was no price on the deed of sale when it was forwarded from the EDA to the Winchester law firm of McCarthy-Akers for completion.
Asked why the EDA would agree to take a $444,990 loss or even a $651,690 if disputed EDA developmental and peripheral purchase costs are included, Silek said, “I don’t think they did,” and referred us to attorney Doug McCarthy of the McCarthy-Akers law firm for further information.
As we first wrote in April, as of publication there has been no response to a phone-message inquiry about the transaction from the attorneys who represented the buyer in the now legally-disputed sale.
Of the transaction, the initial March 26 filing of the EDA civil suit says, “When interviewed on December 6, 2018, Defendant McDonald continued to maintain that the Aikens Group would refund the Warren EDA the full cost of the Royal Lane Property and any improvements, when she knew said property had been conveyed by the Warren EDA on November 28, 2018 to Cornerstone for consideration of $10.”
That transaction came as scrutiny of McDonald’s executive leadership of the EDA was intensifying as the Cherry Bekaert financial fraud investigation progressed. Following several hours of closed session discussion of the Cherry Bekaert findings and her job performance on December 14, 2018, McDonald had her contract, check-writing and administrative authority over EDA bank accounts stripped by the EDA board.
Facing a second closed session on the same topics a week later, McDonald submitted her resignation by email, and according to the EDA lawsuit attempted to cap her financial liability to the EDA at $2.7 million dollars.
As previously reported, in initial defense motion filings McDonald’s now former civil case attorney Lee Berlik claimed his client was being vilified and scapegoated for past bad decisions of the EDA Board of Directors.
However, the EDA civil action alleges a lengthy pattern of gaps, conflicting or misinformation from McDonald to the EDA board regarding what is termed the “Royal Lane Property Embezzlements” among other allegations of financial fraud that have led, not only to civil liability claims against the former EDA chief executive, but also 32 felony financial fraud indictments from a Special Grand Jury empanelled to investigate potential illegalities tied to the EDA civil suit.
And now it seems the Aikens Group finds itself on the perimeter of that EDA civil litigation regarding what has been a twisting and often inexplicable, five-year saga surrounding the attempted transfer of the Campbells’ 3.5-acre Royal Lane parcel to a public use.
Also unanimously approved after the Closed Session, on a motion by Jorie Martin, seconded by Blanton, was authorization for Executive Director Doug Parsons to forward Adjusted Journal Entries developed by retired County Finance Director Carolyn Stimmel and Hottel & Willis’s Heather Tweedy to the Yount-Hyde-Barbour accounting firm for use in development of the EDA’s 2018 Audit Report; and on a motion by Harold, seconded by Tom Patteson, acceptance of the Commission Agreement for the sale of the EDA-owned McKay Springs property, subject to receiving the Agency Agreement within 14 days.
Open Session Business
The pending McKay Springs property transfer and a County Planning Commission Public Hearing two days earlier on Wednesday, November 13, were topics discussed During County Administrator Doug Stanley’s Report during the open portion of Friday’s meeting.
That open portion of the meeting was eventful as the full EDA Board received monthly reports and six-month Strategic Priorities Lists from the EDA’s Asset Management, Finance, Communications and Executive Committees; as well as the monthly report on County business; and Executive Director Parsons’ Strategic Priorities List.
Major topics included the status of the Afton Inn as far as the developer resuming work on site; the status of removal of the Earth Right Energy-installed solar panels on the EDA’s Kendrick Lane Office Complex to allow roof repairs to facilitate empty space rental marketing; and the status of resolving payment issues with the Town of Front Royal on the new Police Station across Kendrick Lane.
As part of the Asset Committee Report Jorie Martin told the board that there had been three replies on the solar panel RFP, with one of particular interest. That one was from a non-profit with the expertise to remove the panels, and then market them for resale at no cost to the EDA. Martin added that it was possible the EDA could even see some revenue from the arrangement.
The EDA is abandoning the idea pushed by McDonald to provide sustainable solar power to the EDA Office Complex, ostensibly as an incentive to help attract a high-end commercial client to the county, supposedly Amazon according to one former board member. Issues include a lack of individual unit metering equipment and the fact the Town has sole authority to charge for the provision of power inside the town limits.
During discussion of the Kendrick Lane roof-solar panel situation it was noted that one positive was that the solar panels were not bolted to the roof in any way, and rather are just sitting on the roof on the panel row bases. Executive Director Parsons pointed out that it had been established that the roof damage did not come from the solar panel installation, but was a consequence of “faulty roof work ages back”.
Also during the Asset Committee Report Harold said the committee “was sad to report that the majority of current bad debt and aging receivables is owed by the Town of Front Royal for their municipal projects”. Primary among those projects is the $8 million to $11 million Town Police Station project financed through the EDA.
Interim Town Manager Matt Tederick was present and in response to a question told the EDA that “the Town is in receipt of the invoice that was most recently sent” regarding the police station and that it would be discussed at a coming council work session.
Tederick also said the Town had received an EDA FOIA request and that the Town Finance Director had scanned relevant material which should be forthcoming shortly. The Interim Town Manager said he had discussed with the Town Attorney setting up a conference call for 3 p.m. Monday to discuss Town-EDA issues.
The Town has filed civil litigation against the EDA to collect “as much as $15 million” in assets it believes were misdirected or lost by the Town during McDonald’s executive leadership of the EDA.
Talking to the press after the EDA went into Closed Session Tederick said he believed the referenced FRPD project invoice was for $8.7 million dollars, with assessed interest calculated at 3.5%, which he added, “differs from the agreed-upon terms the Town was originally offered by the EDA.”
Tederick confirmed the Town’s perceived agreed-upon interest rate on the FRPD project involved New Market Tax Credit Program (NMTC) financing, which is believed to calculate at about 1% over the life of the bond payback.
“So it’s all coming to a head and we’re trying to figure out how to best move forward,” Tederick said. Asked if the Town and EDA were trying to make the financing dispute less adversarial, the Interim Mayor replied, “Make it less adversarial, of course. But we have to agree upon what we can agree upon. And what we can’t agree upon we have a judge to determine what the right numbers are.”
As Royal Examiner has previously reported, a council majority decided to gamble on a best case New Market Tax Credit scenario brought forward by McDonald during consideration of a bond issue on a number of Town or County Capital Improvement Projects. That NMTC Program would have offered a seven to nine-year interest free payback term over an estimated 20 or 30 year payback.
However, that gamble was made over the advice of then-Town Manager Joe Waltz, Town Finance Director B. J. Wilson and NMTC Regional Administrator People Inc. representative Brian Phipps.
Due to uncertainties with the NMTC Program’s future, as well as municipal competition for limited regional funds controlled by People Inc, Waltz, Wilson and Phipps all recommended to Council that a bank-offered, locked-in 2.65% interest rate over a 30-year payback term was the best bet because its favorable interest rate was locked in and the money was not subject to being lost in a municipal competition for funding.
It was also later established that the FRPD headquarters project didn’t qualify for the NMTC program because it was a capital improvement project that did not create jobs, a primary goal of that federal and state overseen program.
“Here comes the judge,” as comedian Flip Wilson used to say.
Watch the entire open session EDA Special Meeting, with the above-referenced discussions and reports, among others of high interest in the exclusive Royal Examiner video:
McDonald Defense Counsel Renews Motions, Including for a New Trial, as Feb. 12 Sentencing Date Looms
Federal officials in Harrisonburg have verified that defense counsel for former Front Royal-Warren County Economic Development Authority Executive Director Jennifer McDonald has filed renewed motions seeking a new trial for their client, as well as the overturning of several of the 34 guilty verdicts a federal jury of six men and six women in Harrisonburg delivered on November 1. Verdicts being sought to be overturned include several counts of bank fraud and one of aggravated identity theft. The latter of those charges involves the use of ITFederal principal Truc “Curt” Tran’s name in promoting one of the real estate transactions McDonald was convicted of using to misdirect money to her personal benefit or that of others under the guise of conducting FR-WC EDA related business. Attempts to reach defense counsel about their filing were unsuccessful as of publication.
The defense has submitted its motions, similar to ones denied by Judge Elizabeth K. Dillon at trial, as the sentencing of McDonald, set for 10 a.m., Monday, February 12, 2024, looms over their client, who remains free on bond. The defense motions reiterate points made by federal Public Defenders Office attorneys Andrea Harris and Abigail Thibeault at trial and in closing arguments delivered October 31. The three defense witnesses called on that final day of the trial appeared to be presented in an attempt to discredit some of the 67 witnesses called by the prosecution in the trial that began on August 21 and ended on November 30, following several delays of a week to several weeks due to a need to suspend or reschedule the trial because of medically verified illnesses or issues of involved parties, on several occasions defendant McDonald.
The new motions, like those rejected at trial, focus on the defense’s central contention that McDonald and the FR-WC EDA had entered into a secret agreement behind closed doors to pay McDonald $5 million or more in exchange for her not filing a sexual harassment or assault lawsuit against local government officials over actions she alleges during her tenure as FR-EDA executive director. The lone signature on a defense exhibit submitted in support of this scenario belonged to former FR-WC EDA Board Chair Patty Wines, who was by then several years deceased. The prosecution asserted the signature was a forgery. Other EDA officials called by the prosecution, including board member Ron Llewellyn, also unhappily called as one of the defense witnesses on October 31, denied any knowledge of the existence of such a document. It was noted during trial testimony that such a document could not have been approved without a full vote of the EDA Board of Directors.
The defense motion for a new trial centers on the asserted exclusion of evidence related to the alleged sexual harassment secret agreement. Arguments about the exclusion of a transcript of grand jury testimony given by someone with alleged knowledge of the secret agreement or the absence of that person being called as a witness at trial appear to be at the center of the mistrial/new trial motion. There is also an objection to a related jury instruction given by Judge Dillon, noting that the prosecution didn’t have to produce every piece of evidence or potential witness related to the case at trial.
According to the federal 10th Western District of Virginia website, thus far a hearing date on the new defense motions has not been set for the Harrisonburg federal courtroom.
McDonald was accused of diverting as much as $ 6.5 million of EDA assets to her direct personal benefit out of an estimated $26 million alleged to have been moved under false pretenses during a four-year period (2014-2018) of her executive leadership of the FR-WC EDA. Part of that larger total, a $10-million loan with additional developmental expenses estimated at as much as $2 million, was approved in support of Tran’s ITFederal company’s development plan earmarked for 30 acres of the 148-acre Royal Phoenix Business Park property in Front Royal at the former Avtex federal Superfund site. EDA officials and civil cases attorneys assert that a $10-million loan and subsequent addition of developmental expenses were achieved under false pretenses as to Tran’s ability to achieve his submitted developmental plan. However, at the time some of these McDonald-involved real estate transactions were occurring, between 2016 and 2018, information was being circulated that Tran was planning to invest in other business opportunities at other locations in the county. Tran has said such investments were discussed but never finalized and never signed on to by him.
Town Announces Withdrawal of its Civil Litigation Against the FR-WC EDA
At 2:12 p.m., Wednesday, November 15, the Front Royal Town Council Clerk’s office issued a press release announcing the dropping of the Town’s civil litigation against the Front Royal-Warren County Economic Development Authority (EDA, FR-WC EDA). The release portrays the withdrawn litigation as a good faith effort to reduce EDA “financial scandal”-related legal expenses ultimately falling on the shoulders of town and county taxpaying citizens. The fifth paragraph of the six-paragraph release, opening with a reference to former EDA Executive Director Jennifer McDonald, recently convicted on 34 criminal counts related to the EDA “financial scandal” in the 10th Western District of Virginia federal court, reads:
“The legal proceedings flowing from McDonald’s misdeeds have been ongoing for several years. The local community, as both town residents and county taxpayers, has already shouldered substantial legal costs. In order to prevent further financial strain on the citizens and in recognition of the actual amounts remaining in dispute between the Town of Front Royal and the EDA, the Town of Front Royal has decided to non-suit its lawsuit against the EDA. This move is intended to save public funds and reflects our commitment to the community’s welfare. We hope this gesture will be met with a similar commitment from the EDA.”
It might be noted that after the Town filed its civil litigation against and withdrew from future involvement with the jointly created EDA, the now unilaterally County-overseen EDA filed a countersuit, citing financial obligations of the Town related to the EDA “financial scandal” and projects, including funding the construction of a new town police station, done on behalf of the Town during that time-frame.
One familiar with the dueling litigations and a portion of the Town’s justification framed around the fact that town officials no longer appointed EDA board members (a voluntarily given up authority*), thus had no EDA oversight responsibilities, might wonder if a reassessment of the strength or weakness of Town’s legal position in the now-abandoned litigation might have also factored into the decision to abandon the civil suit.
But whatever the driving factor, let’s celebrate what seems a positive move toward improved County-Town relations.
* FOOTNOTE: The Town-County compromise on withdrawing the Town’s responsibility for EDA operational funding may be recalled as part of the effort to end the double-taxation of town citizens for joint Town-County operations, since town citizens are also county citizens and ended up paying taxes twice for jointly overseen operations. The EDA funding agreement was part of a move that put operational funding of jointly beneficial operations totally on the County side. As we recall, other departments where similar agreements were reached to stop town citizens from being double taxed included Fire & Rescue, Parks & Recreation, and Samuels Public Library.
McDonald Found Guilty on All 34 Criminal Counts in EDA ‘Financial Scandal’ Prosecution
Just after 1 p.m. on Wednesday, November 1, slightly over four hours after beginning deliberations on the 34 criminal counts against former Front Royal-Warren County Economic Development Authority Executive Director Jennifer Rae McDonald regarding allegedly embezzled or misdirected EDA assets, the six-man, six-woman 10th Western District of Virginia federal jury returned guilty verdicts on all 34 counts. McDonald and her two federal court-appointed attorneys sat quietly at the defense table as each charge, and each verdict was read into the court record consecutively by a court clerk.
Over the objection of lead prosecutor Sean Welsh, Judge Elizabeth K. Dillon allowed McDonald to remain free on bond under the existing guidelines under which she has been free since the 34 federal criminal indictments were handed down by a federal grand jury on August 25, 2021. As has been reported, federal prosecutors inherited the case from two state prosecutors offices, Warren County (recusal due to staff work familiarity with some defendants) and Rockingham County (complexity, time involvement). After her arrests at the state level in mid-2019, McDonald was also free on bond or home arrest for the bulk of the time since she was initially charged at the state level.
Judge Dillon cautioned McDonald, as she said she would any defendant, against violating the terms of her bond, including showing up for her sentencing hearing at an as-yet undetermined point of time, or risk facing additional criminal charges carrying as much as 10 years imprisonment and $250,000 in fines. The judge noted a common 90-day time-frame between conviction and sentencing. She gave the defense 30 days to file any post-conviction motions.
In challenging the continuation of McDonald’s bond, prosecutor Welsh pointed to conflicting stories told by two of the defense witnesses the previous day as an indicator the defendant was continuing a pattern of deception to the court to justify her actions in moving EDA assets she now stands convicted of moving fraudulently. Those witnesses were former prosecution witness and former EDA Board of Directors member Ron Llewellyn, and former post-EDA financial scandal-era McDonald employer Justin Simmons. They told conflicting stories about an incident the defense asserts happened this October 22, involving McDonald and Simmons encountering Llewellyn at a church parking lot, leading to an unpleasant verbal exchange. Llewellyn denied the encounter occurred, citing that he was out of town that day at a football game in Salem. The prosecutor asserted certain evidence about a law enforcement search of McDonald’s home property when she wasn’t there and descriptions of her state of mind from a live-stream viewing of it on her phone indicated the church parking lot incident could not have occurred that day.
Defense counsel Andrea Harris countered that the incident time-frames were not mutually exclusive of both possibly having occurred. She said there was no evidence her client posed a threat to her community or to herself, and asserted that her track record of compliance with bond conditions and court appearances with all the charges facing her, indicated she was not a flight risk.
In the wake of defense counsel Harris recounting McDonald’s track record of appearing for scheduled hearing and trial dates, other than when she was being treated medically, as noted above Judge Dillon extended McDonald’s bond conditions pending sentencing.
As previously reported, after inheriting the case from two state prosecutors offices, Warren County (recusal due to staff work familiarity with some defendants) and Rockingham County (complexity, time involvement), on August 25, 2021, a 10th Western District of Virginia Federal Grand Jury handed down 34 federal criminal indictments against McDonald on charges including bank fraud (10 counts), wire fraud (7), aggravated identity theft (1), and money laundering (16). While total EDA “financial scandal” losses have been estimated at $26-million, including $12 million in the ITFederal loan and related EDA investment, evidence presented at trial indicated McDonald moved over $5 million, perhaps as much as $6.5 million, to her personal benefit. She was initially arrested and charged criminally at the state level in mid-2019.
After a Spooky Courthouse Halloween McDonald Criminal Trial Goes to the Jury
After over four hours of closing arguments (prosecution 2:33; defense 1:32; prosecution rebuttal:21-minutes) in the wake of presentation of the defense case in less than an hour with the calling of just three witnesses, the 34-count federal criminal case against former Front Royal-Warren County Economic Development Authority Executive Director Jennifer McDonald went to the jury at 5:45 p.m. Tuesday afternoon, October 31.
But that wasn’t until after court was delayed for nearly a half hour by an alarm and recorded message: “Fire Emergency reported in the building. Please evacuate the building by the nearest exit. Do not use the elevators,” that went off repetitively for nearly a half hour after beginning at 4:45 p.m. To our knowledge, Fire and Rescue first responders found no fire in the building this Halloween day. But it was a pretty spooky interlude on the final day of the off-again, on-again trial that began on August 21 and saw two delays, the second one of a month, due to various involved party health issues.
Perhaps the most interesting legal development of the day was defense counsel Abigail Thibeault’s closing argument focus on what the prosecution had dismissed as one of the more unbelievable defendant explanations of her movement of EDA money to her own use. That was the defense-alleged secret “Voluntary Settlement Agreement” between the EDA Board of Directors and McDonald to assure her silence and non-suit over what she claimed were sexual harassment and sexual assaults by County officials, including former County Administrator Doug Stanley, among other high-profile local officials. The price of that silence was an alleged $6.5 million the defense contends was agreed to be secretly paid to McDonald, thus explaining some of the movements of EDA assets to her own use that the prosecution presented as evidence of fraud and criminal misdirection of EDA money.
“This is about sexual assault … This story is much bigger” than what the prosecution had presented to them, Thibeault told the jury of the notion that an economically and sexually privileged, male-dominated county elite had set McDonald up to take a fall for challenging their dominance.
Lead prosecutor Sean Welsh countered Thibeault’s assertions in rebuttal, telling the jury the Voluntary Settlement Agreement theory was countered by multiple pieces of evidence the prosecution had presented to them. He pointed to other prosecution witness-testified false allegations McDonald is alleged to have made to explain some of her financial transfers to achieve real estate and other transactions. Among those were Larry Tuttle’s alleged financing of several McDonald/Da Boyz LLC real estate deals he testified he had no financial assets to accomplish. Why lie about such things if there was a simple explanation, such as the EDA Board of Directors authorizing the transfer of assets to McDonald? Welsh asked the jury.
After the 10th Western District of Virginia federal courthouse building was evacuated and cleared of any fire and the prosecution’s closing rebuttal was completed, a final round of procedural instructions from Judge Elizabeth K. Dillon was given to the jury. The jury was then sent out to select a foreman and determine whether they wanted to begin deliberations immediately or return the following day. After 10 minutes, the court was informed the jury had decided to return on Wednesday to begin the final chapter of this trial. Questioned about a preferred starting time by the judge, they opted for a 9 a.m. start Wednesday morning.
As previously reported, after inheriting the case from two state prosecutors offices, Warren County (recusal due to staff work familiarity with some defendants) and Rockingham County (complexity, time involvement), on August 25, 2021, a 10th Western District of Virginia Federal Grand Jury handed down 34 federal criminal indictments against McDonald on charges including bank fraud, wire fraud, aggravated identity theft, and money laundering. Those charges are related to the alleged misdirection of an estimated $ 26 million in municipal and EDA assets to personal use and enrichment of McDonald and alleged co-conspirators.
Judge Denies ‘Renewed’ McDonald Defense Mistrial Motion – Defense Case to Open Tuesday, October 31
Following a closed evidentiary hearing Thursday afternoon, October 27, Judge Elizabeth K. Dillon denied a “renewed” defense motion for a mistrial due to repeated delays in the federal criminal prosecution of former Front Royal-Warren County Economic Development Authority Executive Director Jennifer Rae McDonald. The defense initially called for a mistrial on September 26. While taking that motion under advisement, Judge Dillon expressed a preference for the alternative of “briefly suspending the trial” to accommodate apparent health issues with the defendant and resuming it as an alternative to a mistrial. The trial is now scheduled to resume at 8 a.m. Tuesday morning, October 31, with the anticipated opening of the defense case. November 1 has also been set aside to accommodate the defense presentation, any motions, closing arguments, and jury instructions before the case is handed over to the jury for deliberations.
The scheduled start of what is expected to be a brief defense presentation, perhaps taking less than a full day with three or less witnesses being called, was again delayed on Friday, October 27. The scheduled 10th Western District of Virginia federal court starting time of 8:30 a.m. was adjusted late Thursday to a 3 p.m. Friday start. And shortly after that late Friday start and the beginning of the remote connection of several witnesses to be called during the hearing, Judge Dillon asked if either counsel wanted to request that the hearing be closed to the public.
“Yes, your honor,” was the reply from the court-appointed defense team of Andrea Harris and Abigail Thibeault. It might be noted that defendant McDonald was again not present at the defense table, as she had not been after lunch break the previous day. A clue as to that absence and the defense request for a closed hearing may have been heard during the beginning of the remote witness connection process. One of those witnesses was referred to as “doctor” and a comment concerning “the name of the patient you’ll be discussing” was made. According to the PACER court website, a total of five people testified during the closed hearing of October 27, all of them cited as doctors: “1. Dr. Miklos Szentirmai – via Zoom 2. Dr. David Saenz – via Zoom 3. Dr. John Craig Henry – via Zoom 4. Dr. Anne Bagley 5. Dr. Melanie Matson – via Zoom …”
As noted in yesterday’s story on the closing of the prosecution case and delay in opening the defense case, defense counsel told the court that their client had a cardiac pacemaker installed recently in the wake of health issues leading to a recurring elevated heart rate and blood pressure that led to a delay of a month, Sept. 26 to Oct. 26, in the trial.
As previously reported, after inheriting the case from two state prosecutors’ offices, Warren County (recusal due to staff work familiarity with some defendants) and Rockingham County (complexity, time involvement), on August 25, 2021, a 10th Western District of Virginia Federal Grand Jury handed down 34 federal criminal indictments against Jennifer McDonald on charges including bank fraud, wire fraud, money laundering, and aggravated identity theft. Those charges are related to the alleged misdirection of an estimated $ 26 million in municipal and EDA assets to personal use and enrichment of McDonald and alleged co-conspirators. The latter are yet to be indicted criminally at the federal level, likely due to speedy trial issues. A number of alleged co-conspirators were charged criminally at the state level, with charges then dropped by Warren County prosecutors to prevent defense motions for dismissal due to looming speedy trial statute violations. The case has been defined as “complex” due to the amount of evidentiary material involved, cited at well over a million pages of doc
Prosecution Rests in McDonald Trial – Recent Health Procedure of Defendant Revealed as Start of Defense Case Delayed After Lunch Break
The prosecution in the federal criminal trial of former Front Royal-Warren County Economic Development Authority (FR-WC EDA, EDA) Executive Director Jennifer McDonald rested after the testimony of the final of its 57 witnesses Thursday morning, October 26. That witness was Kevin Nicholson, a Federal Bureau of Investigation (FBI) forensic accountant. In direct examination, Nicholson testified about the path of funds originating with the EDA to McDonald, as well as her husband Samuel North, that were used in a series of personal real estate and other transactions, including the paying off of various personal bills, as well as the use of ITFederal principal Truc “Curt” Tran’s name in one of those real estate transactions on property located at 2890 Buck Mountain Road.
During Monday’s hearing announcing the two-day delay of the trial to Thursday due to technical evidentiary issues, the prosecution had estimated Nicholson being on the stand for 90 minutes to two hours. After an hour and 20 minutes of direct examination tracing those multiple financial transactions the prosecution asserts were evidence of the various levels of fraud and the one aggravated identity theft charge involving Tran that McDonald is accused of, Nicholson was cross-examined for five minutes by the defense, with another two minutes of re-direct examination. During cross and re-direct examination defense and prosecution counsel sparred over the exclusion of some transactions in Nicholson’s chart references and the terminology of “loan” or “line of credit” used by Nicholson during his testimony. The defense also elicited an admission by Nicholson that he had worked with the prosecution in the assembly of some of the evidence presented in support of the prosecution’s case.
Following Nicholson’s hour and 20 minutes on the stand, the prosecution rested at 10:35 a.m. However, rather than moving directly to the opening of the defense case, the jury was dismissed as the defense filed motions for dismissal of several of the charges against their client as unproved by the prosecution evidence presented. Those dismissals involved several cases of bank and wire fraud, as well as the aggravated identity theft involving the use of Tran’s name in the Buck Mountain Road transaction. After an involved defense presentation, the prosecution argued against the standards cited by the defense, asserting that they had proved not only fraud but the use of Tran’s name to facilitate a real estate transaction they believe the bank would not have approved with only McDonald’s name attached to it.
Judge Elizabeth K. Dillon said she would need time to review some of the evidence cited in the dueling arguments, and she would reserve a decision on the defense motions for dismissal of some counts — 8 thru 10 and 14 thru 17 — “at this time.” Judge Dillon then asked if the defense was ready to present evidence in their case. This led to a brief consultation with their client, after which the defense team of Andria Harris and Abigail Thibeault asked for five minutes to consult with their client. At that point, at 10 minutes of noon, Judge Dillon called the jury back in and released them for lunch. Following the five-minute break, the judge noted that defense counsel had told her that McDonald would invoke her Fifth Amendment Constitutional right against self-incrimination, declining to testify. Judge Dillon then queried McDonald on her decision, asking if it was, in fact, her decision alone not to testify.
“Yes, mam,” McDonald responded.
The judge then overruled a prosecution objection to the calling or recalling of certain witnesses by the defense. Former EDA board member Ron Llewellyn, who had testified for the prosecution, was present in the hallway outside the courtroom as a potential defense witness. It was a situation he did not seem overly pleased about. However, Judge Dillon noted that the prosecution could object to certain lines of questioning during the disputed witness’s testimony.
Court then adjourned for lunch at 12:01 p.m. When court was reconvened at 1 p.m., the judge took both prosecution and defense counsel into chambers for discussion. The jury was brought in at 1:15 p.m. while the judge and counsel were still in chambers. Twenty minutes later, the judge and counsel returned to the courtroom. Judge Dillon then dismissed the jury, instructing them to return for an 8:30 a.m. start of the defense case the next day, adding that she anticipated the case being turned over to them for deliberations before the end of the day on Friday.
Ongoing health issues?
An unexpected piece of information was revealed by defense counsel shortly after court was convened Thursday morning at 8:30 a.m. That was that their client had recently “had a pacemaker installed” in the wake of her health issues that delayed the trial for a month, from September 26 to October 26. Those issues, according to sources, were a collapsed lung due to pneumonia and consequent raised heart rate and blood pressure that sent McDonald back to the hospital when the trial had been expected to resume in the last week of September.
McDonald was not in court with her counsel after the lunch break. One person present outside the third-floor courtroom after lunch said there had been word EMTs were present outside the courthouse. Attorneys on both sides of the aisle declined comment on whether EMTs had been summoned for the defendant. However, with her recent elevated blood pressure and heart rate issues, it might be noted that the courthouse elevator became un-operational early in the day on Thursday. While leaving for lunch break, McDonald had stepped aside to let several people following her to the stairs to pass, as she said it might take her a while to make it down. One might wonder how the long climb up those stairs after lunch might have impacted her health-wise, apparently not too long after having a pacemaker installed.