The Royal Examiner has learned that the Town of Front Royal began examining its finances several months ago regarding the Front Royal-Warren County Economic Development Authority, and the amount the Town should have paid the EDA for various services the entity has provided the Town of Front Royal.
Emails obtained by Royal Examiner through a Freedom of Information Act (FOIA) request indicate that the EDA may owe the Town nearly $300,000.
In an email dated Sept 18, 2018, EDA Executive Director Jennifer McDonald wrote to Front Royal Director of Finance B.J. Wilson that, “According to the documentation and with help from our auditors and new accounting firm we believe the EDA owes the Town $291,278.64.”
Apparently, the Town had been charged incorrect amounts for debt-servicing since 2009, according to documents obtained by Royal Examiner. B. J. Wilson, Director of Finance for Front Royal has been working with the Council to review all debt-servicing documents over the last several months.
Mr. Wilson indicated in an email to Royal Examiner Tuesday that “the Town became aware of some potential inconsistencies between the amount the Town believes it should have paid the EDA for various services the EDA has provided the Town, and the amount the Town has paid the EDA. The Town and EDA are currently working to resolve these issues.”
Ms. McDonald did not respond to a Tuesday email from Royal Examiner.
The Town Council has apparently been discussing debt servicing issues since early spring, according to Mayor Hollis Tharpe, who said in an interview that “citizens have nothing to be concerned about.” When pressed as to why the public had not been told that the council was looking into the expenditure and possible misallocation of public funds, he exclaimed, “Public opinion will be public opinion!”
Unsealed State Police documents claim McDonald lied about gambling winnings
Unsealed documents related to a Virginia State Police investigation into the finances of former Front Royal-Warren County Economic Development Director Jennifer McDonald indicate that she lied about slot-machine gambling winnings at the Hollywood Casino in Charles Town, West Virginia.
The documents released on Tuesday, April 23, indicate that between 2014 and September 30, 2018, McDonald lost a total of $753,207.32 – “This figure includes winnings and losses for McDonald,” one page of the unsealed documents states.
“The Hollywood Casino records obtained by Court Order indicated information that was in direct conflict to what Jennifer McDonald has stated publicly,” VSP Special Agent Eric Deel reports in a nine-point affidavit filed in November 2018.
In January 2018, McDonald approached this reporter about doing a story about a recent slot machine jackpot she said she hit at Hollywood Casino. The unsealed VSP documentation summary references the consequent Royal Examiner article published February 8, 2018, citing, “public concerns over real estate investments that appear to be beyond her financial means”.
At the time McDonald told Royal Examiner that word of a recent jackpot she had hit was on social media and she wanted to get an accurate story out. In that Royal Examiner story McDonald claimed three years of slot machine winnings of between $500,000 and $800,000 each year, totaling about $2 million.
The timing of McDonald’s report of years of winnings spending a minimal amount of her own money – between $1,000 and $3,000 along with comparable amounts of house money, she estimated – coincided with Royal Examiner Editor Norma Jean Shaw’s exploration of large amounts of cash McDonald was using in her private real estate business.
McDonald and two real estate companies she owns, along with a partner in those businesses, Warren County Sheriff Daniel McEathron, are listed among nine defendants named in a civil litigation filed March 26 on behalf of the EDA. That civil suit seeks recovery of a minimum of $17.6 million in alleged misdirected or embezzled EDA assets.
McEathron, like Earth Right Energy Solar Commercial LLC principals Donnie Poe and Justin Appleton, has issued a statement denying knowledge of any financial improprieties in transactions related to McDonald business or contractual matters.
McDonald resigned the EDA executive directorship she had held for a decade on December 20, 2018, under increasing scrutiny by the EDA Board of Directors three months into an ongoing forensic audit of EDA finances over the past decade.
Other information gleaned from a quick perusal of the 152 pages of documentation released by the Warren County Circuit Court Clerk’s Office Tuesday morning also indicates VSP subpoenaing McDonald financial records at two bank branches with Strasburg addresses, United Bankshares, Inc at 120 Oxbow Drive and First Bank at 406 Borden Mowery Drive. Both bank record subpoenas date back to January 2, 2014.
Records sought included “all deposits, electronic fund transfer, wire transfers, automated clearing house (ACH), credit card transactions” and ‘supporting documentation for any transaction …”
An affidavit notes that the Town of Front Royal asked VSP “to investigate fraudulent and misleading conduct and reporting by McDonald in reference to a debt service quarterly billing” to the town government. As result of an internal audit by Town Finance Director B. J. Wilson ordered by council to explore an internal loan, last August town officials approached McDonald and then EDA Board Chairman Greg Drescher about debt service overpayments. Perhaps coincidentally, Drescher resigned his board chairmanship the following day.
“Numerous explanations were given which were later shown to be false and incorrect,” the affidavit states. “When questioned further, McDonald personally provided an amortization schedule to support the bond. The incorrect principal amount, incorrect ending date and incorrect interest rate was shown. After a meeting held … on 8/23/18, McDonald stated that the entire $1.9 million VDOT cash bond was an accounting error, a mistake, made by the EDA bookkeeper and that no such VDOT cash bond has been posted nor any bank borrowing to pay such payment. VDOT has confirmed that they had not demanded the bond.”
The affidavit adds that, “McDonald, as Executive Director, has offered to reimburse the Town of Front Royal tens of thousands of dollars for said discrepancies in billing. She has also asked for an audit that would be confidential and not made public” – Uh oh, too late for that.
While the commonwealth’s motion to unseal the documents notes it would do so after completion of “critical portions of the investigation” anticipated this spring, it adds that “media coverage of the issues in this investigation” has been “particularly dogged” and “comprehensive” rendering those concerns now “a moot point.”
Do we see a change of venue request coming from any potential prosecutions related to this investigation?
Tran credited McDonald with saving ITFederal project – but what was saved?
Contacted by phone on April 20, ITFederal principal Truc “Curt” Tran said he was limited in what he could say about his plans for his 30-acre parcel at the Royal Phoenix Business Park in Front Royal.
“On the advice of my attorney, no comment,” Tran said in reply to a question about how being named a defendant in EDA civil litigation filed March 26 might impact his plans as the first commercial tenant recruited to the former Avtex Superfund site.
However Tran did reply briefly when asked if he would continue to attempt to market the nearly completed, one story, 10,000 square-foot Phase One building as a rental space despite reports he no longer plans to re-locate his ITFederal tech company here from Northern Virginia.
“When did I say that?” Tran replied, seeming to focus on the ITFederal aspect of the question. Told it has been a general topic of conversation since both Royal Examiner and the Northern Virginia Daily reported an altered ITFederal plan on March 14, Tran added, “There is so much misquote and rumor.”
And while this paper’s source was protected Daily reporter Josh Gully cited Tran himself as the source of the information in a March 12 phone conversation. Pressed about his current plan for the property Tran returned to his attorney-instructed “no comment”.
But when this reporter and Gully encountered Tran in the EDA parking lot during a December 20, 2018, EDA Board of Directors closed session he was upbeat about the Front Royal project.
“You know every project on a brown field (environmental remediation site) has issues, okay, so we were very hesitant but here we are. So the building is going up, the road is coming in, business is coming in. And so I just met the governor on Monday (Dec. 16) and I try to tell him about the project out here – local, state, federal we all work together – we sing ‘Gumbaya’ and we make it happen because this is a beautiful piece of land and we try to market it,” Tran said.
“The EDA has been very supportive – we’ve had some glitch, some challenge, like the road issue – that was a mistake,” Trans said of a dispute with the Town over drainage issues tied to construction of the West Main Street connector road through the Royal Phoenix Business Park property.
We asked Tran if he was aware that EDA Executive Director Jennifer McDonald was under closed session board scrutiny for the second time within a week during that day’s EDA meeting. Tran replied, “I heard about this and it’s blowing my mind.”
Told there were suspicions McDonald might be terminated or asked to resign when the meeting re-adjourned to open session, Tran said, “Oh that would be sad. She’s done so much for this area of the county and the town to redevelop, and even me – I was just about to move on and she,” Tran hesitated before adding of the prospect of a turnover at the top of the EDA, “So, so we have to go do this with the next guy’s ideas or something?”
As Tran punctuated his question with a glance southward what he saw was a 30-acre property he acquired for one dollar from the EDA in a stated effort to jump start commercial redevelopment at the former Superfund site that from 1941 to 1989 housed a synthetic fibers manufacturing plant that though three ownerships was this community’s largest employer.
It is a property 3-1/2 years down the road from an October 2015 ribbon cutting with a one-story, 10,000 square-foot building nearing completion out of three buildings promised to total 67,000 s.f. and house hundreds of new jobs. As early as a June 2015 press release, Sixth District Congressman Robert Goodlatte lauded the coming of ITFederal as a $40-million investment in this community that would create 600-plus jobs, primarily high paying tech jobs brought here by ITFederal’s relocation from Northern Virginia.
Recently acquired FOIA material also indicates that it was Goodlatte that pushed the Town of Front Royal and the EDA toward facilitating a $10-million loan to ITFederal eventually accomplished through First Bank and Trust with the 147-acre Royal Phoenix Business Park property used as collateral.
”When we did the EDA to ITFederal closing in mid-September, things got a little confused because of Curt Tran’s changing of things and the added $10,000,000 loan that Congressman Goodlatte asked for,” then EDA and County Attorney Blair Mitchell wrote McDonald and a TLC Settlements staffer named “Lucy” on November 19, 2015.
Mitchell referenced bank questions about how the loan would be secured. “Was the 410 million (apparent typo for $10 million) just unsecured because we expect Curt to repay it from his other investor and financing?” Mitchell’s email concludes.
Due to delays in achieving the bank loan the Town of Front Royal gave ITFederal a $10-million “bridge” loan through the EDA to facilitate the project until the bank loan was agreed upon.
Despite Goodlatte’s promotion of ITFederal as an economic development opportunity for this community and his involvement in securing a $10-million loan now being sought for recovery as part of the $17.6-million EDA civil suit, on December 20 Tran downplayed Goodlatte’s involvement in bringing him to Front Royal and Warren County.
“And so initially it’s not Congressman Goodlatte – a lot of people think Congressman Goodlatte got me out here – in fact it was Frank Wolf,” Tran said of the former 10th District Congressman. Warren County was redistricted out of Wolf’s 10th and into Goodlatte’s 6th District in a 2012 Republican-led redrawing of the commonwealth’s legislative map.
“So I was talking to their (Wolf’s) office and they say, ‘Hey Curt, come out here and help because Warren County is a rural area and they need kind of investment support.’ I went out here and the next thing I know they were redistricted, and that’s why Congressman Wolf’s office hand me over to Goodlatte.
“Front Royal, Warren County – they need help developing, so that’s why we start looking at this place. And then there was all kind of challenge with the federal government running the program – that this is not rural (designation)… they have a separate one and the housing; so it’s really messy.
“So then they told me it was rural and is why I went out here… and then it’s NOT… so that was another crazy challenge,” Tran said of discrepancies in how the federal government classified Warren County regarding economic and demographic variables qualifying his project for access to federal program funding sources.
“So we were about to move out of Warren County because it’s hard to get federal grants and support for programs. So then fortunately enough it wound up Jennifer (McDonald) was around to help bridge it and then I think the congressman (Goodlatte).”
That “bridge” appears to have been the $10-million bridge loan from the Town of Front Royal to help the EDA secure the $10-million First Bank and Trust loan. And from information being circulated about the ITFederal project as late as 2017 a $10-million Town “bridge” – since repaid – to a $40-million investment producing 600, largely high-paying jobs doesn’t seem like such a bad idea.
As explained to Royal Examiner by former EDA Executive Director McDonald in a January 2017 interview (See Related Story), Tran’s originally-presented plan for his 30-acre ITFederal site was multi-phased, three-building project including a total of 67,000 square feet of construction in three structures, one of which would include 20,000 s.f. of rental space, 10,000 s.f. on each of two floors; 37,000 s.f. for an ITFederal office building and another 10,000 s.f. for an ITFederal cloud data center.
“As for job creation you can see from the table below what the anticipated ITF jobs will be salary wise and a total of jobs for the entire ITF operation,” McDonald told Royal Examiner in early 2017, noting that delays in the start of the project would result in year one numbers “a little lower” but adding that the below chart were “strictly ITF jobs and not related to the retail component” of the project.
However 27 months later, year one of the ITFederal plan has yet to begin.
|Personnel Plan||Year 1||Year 2||Year 3||Year 4||Year 5|
|NRC Contract Staff||$2,249,724||$5,155,900||$6,233,850||$7,480,550||$8,228,500|
|Other Contracts Staff||$889,000||$1,778,000||$2,667,000||$4,000,500||$6,000,750|
|NRC Subcontractors Staff||$642,779||$1,187,400||$1,781,100||$2,137,300||$2,351,000|
|Other Subcontractors Staff||$254,000||$508,000||$762,000||$1,143,000||$1,714,500|
|Other Government Staff||$0||$225,000||$337,500||$675,000||$1,012,500|
|Commercial Business Staff||$67,500||$525,000||$1,050,000||$2,100,000||$4,200,000|
As for the current status of ITFederal’s promised jump start of economic redevelopment at the former federal Superfund site, it seems there can only be unanswered questions amidst a flurry of attorney-instructed “no comments” from all sides – so much for “Gumbaya” and timely movement on that $40-million, job-creating economic investment in this community with a 2020 deadline for completion.
Was it all a pipe dream from the start, as former Councilwoman Bébhinn Egger warned in 2016-17 from her research into ITFederal, its contract history and possible reliance on EB-5 Visa Program money – a reliance later verified by FOIA’ed communications between Tran and McDonald dated October 24, 2014*.
Or could it be something worse, or more promisingly a project like its site’s name that might rise like a phoenix from the ashes of current civil litigation, criminal investigations, public finger-pointing and municipal scurrying for explanations?
Stay tuned for the next chapter of “As the EDA forensic audit turns.”
*Footnote: In Tran’s October 24, 2014 email to McDonald stating acceptance of an IDA/EDA offer on “Lot 6 of the Royal Phoenix Park” Tran writes, “Once ACRC (Tran’s American Commonwealth Regional Center) has received final approval from USCIS (U.S. Citizenship and Immigration Services), it can immediately start raising the EB-5 investments to provide loan financing to ITFederal to development (sic) the property and to perform work on the $140 million NRC (Nuclear Regulatory Commission) contract.”
Town, County officials tread lightly around the elephant in the room
With a rising tide of critical public scrutiny of past failures of municipal oversight of the Town-County Economic Development Authority resulting in civil litigation involving an attempt to recover nearly $20 million in misdirected assets at a cost of over three-quarters-of-a-million dollars of taxpayer money; and concurrent criminal investigations stretching to the federal level, one might think a quarterly Town-County Liaison Committee meeting might be rife with discussion of that topic.
However both the town and county governments conduct other business – and as they say on Broadway, “the show must go on”.
So the first 20 minutes of a brief 30 minutes or less Front Royal-Warren County Liaison Committee meeting of Thursday, April 18, was devoted to summary briefings of that other business. Town Manager Joe Waltz and County Administrator Doug Stanley handled presentation of those summaries offered to committee members Bill Sealock and Letasha Thompson on the town side and Dan Murray and Tony Carter representing the County.
With the Town taking on the rotating hosting duties, Vice-Mayor Sealock chaired his second meeting during Mayor Hollis Tharpe’s self-imposed administrative leave pending resolution of a misdemeanor criminal charge involving a massage parlor visit. See Related Story:
Topics on the Town side included:
- the status of Phase One of the West Main Street Extended Project into the ITFederal portion of the Royal Phoenix Business Park from Kendrick Lane – 90% complete to the first building constructed on site;
- construction of a parallel central water utility line into the Route 522/340 North Commercial-Industrial Corridor – a May 6 submission for updated plan evaluation and cost estimates;
- the Town’s halting movement toward enforcement of a property maintenance code that will initially target only blighted and derelict structures – awaiting County feedback on a request to utilize the County’s Board of Building Code Appeals as a more cost efficient method of that implementation;
- resolution of infrastructure issues at a new wastewater treatment plant septage receiving station – accomplished and backflow issues resolved;
- and the status of Phases 2 and 3 of the Happy Creek Road Project – $1.3 million in carryover VDOT funds transferred for use on Phase 2; another $2.5 million committed by the EDA for the project, with a total cost estimate of $16.9 million for both phases and a projected 2026 start date.
On the County side topics included:
- the Crooked Run West developer request for Town central water service extension into the County’s North Corridor – County Planning Commission recommendation of denial of necessary zoning changes to facilitate a 1000-plus residential unit mixed development project that is contrary to both county and town comprehensive plan guidelines; recent receipt of a VDOT traffic study; and June as the earliest estimate of county board of supervisors discussion of whether or not to adhere to its planning commission recommendation of denial of the project;
- Development Review Committee projects – met on March 27 to discuss the Crooked Run West proposal, as well as construction of a new Christendom College chapel, Catlett Mountain Road home construction on existing lots; and in-town projects including an ice vendor business on South Royal Avenue; a daycare on South Commerce Avenue; a proposed Sheetz Gas Station on Shenandoah Avenue; and interior work on A. S. Rhodes Elementary School. The committee’s next meeting is slated for April 24;
- the status of the EnerGov building inspection software upgrades designed to make online self service a customer friendly experience. The status of that software system that initially went live on November 14, 2017, is continued issues to resolve what was discovered to “not provide the public a friendly experience” and discussion with an outside contractor to correct the situation in more timely manner than county staff could accomplish it;
- the County’s project inside the town limits, including Ressie Jeffries Elementary School renovations – completed; upgrades to the Health and Human Services building on 15th Street to accommodate occupancy by the County Registrar’s Office – moved in April 1; and the public school system’s Brighter Futures alternative school program – completed in November; punch list review with contractor under way;
- implementation of the joint town-county tow board – establishment of a tow list of qualified companies on February 6 that will be in effect through June 30, 2020. Citizen complaints were heard about exorbitant tow costs, a main issue surrounding creation of the town board, at an April 3 tow board meeting. However, such complaints have apparently not been officially submitted to the tow board in writing. So, Stanley’s summary indicated “tow representatives” are urging citizens to file official complaint forms which are available online. Contact the county administrator’s office for further detail on accessing those forms.
The elephant in the room
With the above agenda discussion completed by 6:20 p.m., Vice-Mayor Sealock asked if there was any other business to be brought forward. County Board Supervisor Carter noted that the county had agreed to take over as fiscal agent for the EDA, effective August 1.
County Board Chairman Murray noted that the County’s assumption of that role will provide “multiple layers of checks and balances” of EDA financial workings. On the EDA side their board has created redundancies in requiring the signatures of two board members on financial transactions, as well as increased board involvement in the development of those transactions.
As for the increased checks and balances provided by putting the EDA under the fiscal agent auspices of county government, a previous county staff presentation cited direct involvement of the County Finance Department and Treasurer’s Office in procurement policy, bookkeeping and recordkeeping of EDA business. The down side acknowledged is the additional demand on county staff to assume those additional responsibilities for another agency.
But in the current and still evolving legal and political environment it appears that additional demand will be a necessary consequence to assist in putting the EDA’s house back in order; not to mention a step in regaining the trust of what is becoming an increasingly suspicious, and according to Dan Murray, aggressively hostile public. As noted in a related Royal Examiner video, at Tuesday’s county board meeting Murray described being physically pushed Sunday at a diner he regularly frequents by a customer angry about the EDA situation.
And so things progress this spring of 2019, as municipal and EDA officials wrestle with how they allowed what is alleged to have happened within the EDA in recent years happen; and how they will respond to what appears to be a growing social media-fed negative public reaction of a sometimes less than constructive nature.
Busy week for EDA: Appointments, Town FOIA, director hunt, bond issue
On Monday morning, April 15, at the first of two special meetings of the Front Royal-Warren County Economic Development Authority Board of Directors called this week secretary and assistant secretary appointments were made. A three-member quorum – only five of the seven board seats are currently occupied – voted to appoint Ed Daley, in his absence, as secretary; and Vice-Chairman Bruce Drummond took on the duty of assistant secretary. Present were Chairman Gray Blanton, Drummond and Treasurer Tom Patteson, along with Interim Executive Director John Anzivino and Attorney Dan Whitten.
As literally everyone in Warren County not in a coma now knows, the FBI and State Police swooped in Tuesday to search the EDA headquarters and remove some items related to criminal investigations stemming from the EDA forensic audit and consequent civil litigation seeking the return of over $17 million in allegedly embezzled or misappropriated EDA assets.
A coordinated – well, as coordinated as possible – April 17 press perusal of the front portion of the EDA office during Wednesday’s closed session indicated that the computer hard drive and a cell phone previously seen in former Executive Director Jennifer McDonald’s still-locked down office were no longer on her desk. EDA officials would not confirm whether any of the office printers had been removed by law enforcement the previous day.
Wednesday’s special meeting closed session was called to discuss candidates in the running to succeed Interim Executive Director John Anzivino on a permanent basis, or at least as permanent as such things may be. Returning to open session the board quorum of four – up by one from Monday with the addition of Mark Baker – resolved to continue the process of selecting its new executive director.
During a brief discussion with media following adjournment Anzivino declined to speculate on when an appointment might be announced. Previous EDA board discussion indicated a desire to have a permanent director in place in May. Anzivino indicated the field had been narrowed to three from which to choose.
While declining to give any detail on the previous day’s search by federal and state law enforcement, Anzivino reiterated that the EDA will continue to cooperate in the criminal investigation related to information uncovered by the forensic audit of EDA finances underway since mid-September 2018.
Anzivino also said that from personal observation work appears to be continuing on the building on the ITFederal site. ITFederal and its principal Truc “Curt” Tran are among the nine defendants named in the EDA civil litigation seeking recovery of allegedly misappropriated EDA assets. While stating he no longer plans to relocate ITFederal to the 30-acre parcel at the Royal Phoenix Business Park sold to him for one dollar, he has indicated a plan to rent space in the building under construction out.
During the open portion of Monday’s special meeting Board Chairman Gray Blanton broached the idea of getting an accounting of current business the EDA is engaged in as a positive counterpoint to the heavily-publicized scandal revolving around the alleged embezzlement of EDA assets discovered by a lengthy, six months and counting and $760,000 and climbing forensic audit of EDA finances.
Anzivino said he would prepare a press release summarizing property maintenance, project development, and tenant recruitment, including the U.S. Census Bureau for a training center.
Town FOIA request
Also on Monday Vice-Chairman Drummond asked if the town government was going to get its formally requested copy of the forensic audit that has thus far resulted in the filing of civil litigation seeking recovery of that minimum $17.6 million in EDA assets said to have been moved for personal benefit during Jennifer McDonald’s directorship and oversight of EDA finances.
Chairman Blanton responded that he saw no reason the Town shouldn’t get a copy.
However, EDA Attorney Dan Whitten cited a semantical issue with the Town request, which had initially been stated as for the “final report” which Whitten pointed out does not yet exist. The forensic audit continues to develop, so no “final” version is available.
As previously reported, it has been noted that thus far only the EDA Board of Directors has seen the written updates of the forensic audit and Anzivino confirmed that once those drafts of the Mueller Report, I mean the Cherry Bekaert Report have been reviewed by the EDA board they have been shredded.
Following Wednesday special meeting Anzivino said he thought his Tuesday meeting with Town Attorney Doug Napier and Town Finance Director B. J. Wilson went well, and that the semantical issues would be worked through to try and accommodate the Town’s request to be kept abreast of the information thus far available from the forensic audit.
And a bond issue
Following adjournment of the approximately 15-minute Monday meeting, the board broke before reassembling at 11 a.m. for a joint signing of the approximately $11 million bond issue on three capital improvement projects. Those projects are renovations at Ressie Jeffries Elementary School and on county and school space at the Health and Human Services complex in the old middle school building on 15th Street; and construction of the new Rivermont Fire Station.
County Board Chairman Dan Murray joined Blanton and Drummond in signing the documents, with county and school administration staff present, as well as Sands-Anderson bond counsel Dan Siegel.
EDA Investigation: FRPD’s initial interview of Jennifer McDonald, Part 2
In this second segment of the initial interview on June 15, 2017 with Front Royal Police Department Investigators Landin Waller and Crystal Cline, McDonald pushes forward a theory targeting this reporter as a player in the EDA office break-in revolving around inquiries into and source information acquired that ITFederal principal Truc “Curt” Tran was the “secret investor” in the planned Skyline Regional Justice Academy.
McDonald referenced a time I worked at local radio station WFTR (WZRV The RIver 95.3 FM) and claims I accessed public files. However I never actually was in the EDA offices suite while a radio station employee. After being fired from the radio station, perhaps coincidentally at the very time I was seeking information from Congressman Robert Goodlatte and his staff about the congressman’s involvement with and knowledge of ITFederal and its owner, McDonald invited me to come to her office “to talk”, presumably to glean information about what I had learned about Tran and his company.
The following is a transcript of the official incident report for the alleged break-in, reported on May 18, 2017:
Front Royal Police Department Investigation Narrative: Officer Report for Incident 17050871
Date, Time, Reporting Officer: 05/18/17, 14:00, Detective Landin J. Waller Description of the Incident:
On 05/18/17 I, Detective Landin J. Waller, was contacted by Captain Ryman in reference to an incident at the .Warren County Economic Development Authority (EDA) located at 400 Kendrick Lane. Myself and Detective King responded to the scene where we were met by Captain Ryman and Captain Nicewarner. Detective King and I were briefed about the scene by Captain Ryman.
We were advised four (4) 4″ by 6″ personal photographs and a large cut out photograph of Jennifer McDonald were taken from McDonald’ s office and found in the conference room. Three ( 3) of ‘the 4″ by 6″ photographs had McDonald in the picture with her face scratched out with a sharp object. The fourth 4″ by 6″ photograph was a picture of McDonald1 s niece and her toddler aged son with the word “NIGGAR” written in black marker across the face of the child. The large cut out photograph had a black plastic handle steak knife plunged through the forehead of the photo and it was stuck to the head rest of a brown leather office chair where McDonald admittedly normally sits.
There were no signs of forced entry to the buildings windows, and doors. As I noted there was undisturbed dust on the window ledges and on the blinds at every window. The window to McDonald’s office was raised up about two inches and not secured; However there was cobwebs and undisturbed dust on the blinds and window ledge. The two doors of access to the building and office did not have pry marks or signs of tampering.
The scene was photographed and processed by Detective King. Detective King took overall, midrange, close-up, and close-up with scale photographs. All photographs will be attached to this report in the images file. There were 6 items of evidence collected and packaged from this scene. Item #1: (4″ by 6″ photograph of niece and son), Item #2: 4″ by 6″ photograph of McDonald with Dolphin), Item #3: (4″ by 6″ photograph of McDonald with Niece), Item #4: (4″ by 6″ photograph of McDonald and family) , Item #5: (cutout picture of McDonald) , Item #6: (black plastic handle steak knife) . Detective King dusted the conference ‘ table and drawer for latent prints but was not successful.
I interviewed the two employees that were at the office, Jennifer McDonald and Missy Henry. These interviews were audio recorded and will be added to the case file.
From the interview with McDonald, I was informed that she was the Director of the EDA inhere she has been employed since 1999, She advised there are two other employees, Missy Henry and Maria Jones, that work out of this office. McDonald advised me she left the office last evening (05/17/18) at 17:00 or 17:30. She said she went to a Rotary meeting at 19;30. McDonald said left from the Rotary meeting and went directly home and the next morning she arrived to work at about 07:30. McDonald said she went to her office and she and Missy were talking when she noticed some pictures were missing from her office but she was not sure which ones. She said a while later she was notified by Missy of the scene in the conference room – McDonald did say that last Thursday morning she noticed a large knife (from the kitchen area of the EDA) was in her chair in the conference room on 05/11/17, but did not notify the police but thought it was odd.
I asked McDonald if she could think of anyone that might be mad enough to do something like this, she said “yes”. She informed me that there is a group of people who have made derogatory statements about the Work-Force Housing Project in the Royal Examiner. McDonald went on to explain there was a piece of land that was to be gifted to the town for this project; However, the EDA missed the deadline for the land to be gifted and now the land must be purchased. She said the piece of land in question was gifted by her family members (Aunt & Uncle). She stated the Royal Examiner has posted articles about this land deal in which many persons have commented negatively about her and the EDA. She listed Councilwoman Bebhinn Egger, Mike Graham, Stan Brooks, Shea Parker, Tom Conkey, Roger Bianchini, and Norma Jean Shaw as persons who she felt were angry with her.
McDonald informed me that herself, Missy, and Maria Jones are the only ones with keys to the outside of the building and to the office door. She did say there was a spare key for each door in a real estate type lock box that was located on the iron railing of the stoop. She advised that Maria Crigler, The Administrative Assistant of Northern Shenandoah Valley Regional Commission, (the neighboring business) also has the code to the lock box because they have a spare key in the lock box. McDonald informed me the keys are kept in the lock box incase someone forgets their key to the office and needs to gain entry to the office. I was then informed that all 9 employees at Northern Shenandoah Valley Regional Commission have the code to the lock box.
I also interviewed Missy Henry in the conference room. Henry stated she has been employed at the EDA as an Administrative Assistant since 2012. She advised that she left the office on 05/17/17 at 17:05 and did not return to the office around 0800 on 05/18/17. Henry advised me she was the first to notice the conference room scene. Henry also advised me that she had just changed the code to the lock box this past Monday to a 3 digit code instead of a 4 digit code. She advised that no one has been notified of the change except herself, Jennifer and Maria.
I spoke to all the employees at Northern Shenandoah Valley Regional Commission and determined that the last employee to go leave the building was Brandon Davis. X was advised that Davis1 wife went into labor last night and he stopped by the office to grab some items from his desk before going to the hospital. I have yet to speak with him, but all the other employees did not notice anything out of the ordinary on 05/17/17.
Later on that day, I spoke with employee Marla Taylor Jones by phone. Marla advised she is the current Director of Marketing with the EDA and has been since 2009. She said she arrived to work at 08:10 on 05/17/17 and left at 17:00. She did say she noticed a man who was inside the gate of the property and he was holding a phone or a video recorder and it appeared he was recording. She described the male as a white male with a beard wearing blue plaid shirt, shorts, and a ball cap. ‘ She said he went outside to ask him if he needed assistance but he walked through the breezeway and towards Ameri-Sist which is a business on the east end of the building. Jones said she had Henry call Ameri-Sist to see if the man came to their business, but was informed that no one had stopped in. Jones also said that when she was leaving at 17:00 she noticed an old red Ford Explorer or Blazer with a white male inside and the engine was running. She said he was on the road behind the building and she asked him if he needed help. She said he told her he had just made a delivery and was routing his next delivery. She said she thought this was a bit unusual.
On 05/18/17 after clearing the initial asked McDonald if I might have the spare I wanted to set up surveillance cameras, keys. On 05/18/17 at 17:30 hours Myself, Sergeant Cline set up surveillance video scene, I responded back to* the EDA and keys to the building and office because McDonald agreed and gave me the spare Detective King, Detective Fogle and inside the office.
Watch Part 2 of Jennifer McDonald initial interview with Front Royal Police Department that occurred on June 15, 2017:
FBI, State Police descend on EDA headquarters Tuesday morning
Agents from the Federal Bureau of Investigation and Virginia State Police conducted a search and apparent removal of items from the office of the Front Royal-Warren County Economic Development Authority on Tuesday morning, April 16.
FBI Special Agent/Supervisor Neil Mathison told press present at 11:30 a.m. that units had been on the scene since early morning and expected to be done with their search of the premises by mid-afternoon.
Other than that summary of the federal and state law enforcement presence at the scene, information on the nature of the search and its enabling authority was not forthcoming. Boxes were seen being carried in and out of the rear parking lot, main entrance to the western section of the old American Viscose Administration Building the EDA shares with the Northern Shenandoah Valley Regional Commission.
Present in addition to FBI Supervisor Mathison, VSP Special Agent in Charge Lt. John Defilippi and additional personnel from the federal and state law enforcement agencies, was Warren County Assistant Commonwealth’s Attorney Bryan Layton. Layton confirmed that his boss, Brian Madden, was off on Tuesday. The Commonwealth’s Attorney’s Office said that Madden was not expected back in the office until next week.
A Special Grand Jury requested by Madden and authorized by Circuit Court Judge Clifford L. Athey Jr. to explore potential criminal charges related to allegations of financial misappropriations of EDA assets in recent years was empanelled on Thursday, April 11. While tight-lipped like the law enforcement officials present, Layton did say that the EDA Special Grand Jury would determine its own schedule as the members saw fit to accomplish their assigned task.
However asked whether the search in progress had been authorized by the Warren County Special Grand Jury Layton, like the federal and state law enforcement official present, was non-committal.
A Richmond FBI Public Information Officer referenced by Mathison for additional information, said that at this time no further information would be released by the FBI. The VSP public information office deferred to the FBI as the lead agency in the investigation.
Interim EDA Executive Director John Anzivino was seen arriving and entering the EDA office while media was present. In response to a question, Anzivino said he had been able to meet with Front Royal town officials Tuesday morning as planned to discuss a Freedom of Information Act request the Town has filed regarding the results of the six-month-old, $760,000 forensic audit of EDA finances currently underway.
It is the civil litigation filed on behalf of the EDA on March 26, by the Sands-Anderson law firm seeking recovery of a minimum of $17.6 million in allegedly misdirected EDA assets that was the basis for the launching of the Warren County Special Grand Jury.
Mathison, Defilippi and Layton did not respond to questions about whether Tuesday’s law enforcement activity at the EDA headquarters was a result of the special grand jury investigation or another potential investigative source at the state or federal level.