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EDA in Focus

EDA to consider interim director appointment, get audit update this week

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The EDA board comes out of closed session on Dec. 20 to accept the resignation of Executive Director Jennifer McDonald. Royal Examiner File Photo

The Front Royal-Warren County Economic Development Authority has announced a special meeting for Thursday, January 10, 2019. Barring last-minute agenda alterations, the 10 a.m. meeting will immediately adjourn to closed session to discuss three topics: 1/ appointment of an interim executive director; 2/ discussion with legal counsel regarding the ongoing audit and investigation of EDA debt and accounting services; and 3/ discussion of a prospective business or industry locating or expanding in the Happy Creek Area.

It is the first two items that are of the most interest in the wake of the resignation of Executive Director Jennifer McDonald by e-mail shortly before the EDA board’s last closed meeting of December 20. That special meeting also immediately went into closed session to discuss McDonald’s job performance and the ongoing audit of EDA debt and accounting service practices. Acceptance of her resignation letter was announced following the closed meeting.  See related story:   EDA Director McDonald submits resignation by email prior to Thursday meeting

As previously reported EDA finances have been under scrutiny by both the town and county in a series of closed sessions for several months following the town finance department’s discovery of about eight years of overpayments by the Town of Front Royal to the EDA. That overpayment was originally estimated at just over $291,000, though a final figure has yet to be determined. Neither has it been publicly announced whether any irregularities in the EDA’s finances with the county government have become apparent during the audit.

The day after the closed EDA meeting and McDonald’s resignation the Warren County Board of Supervisors had its own special meeting and closed session. Following that closed session the county supervisors voted unanimously to authorize a $90,000 expenditure to pay for three months of work by an outside consultant working on the audit of town-county Economic Development Authority.

That consultant, whose identity had not been revealed based on attorney-client privilege according to County and EDA Attorney Dan Whitten, is one of three financial entities now involved in exploring EDA finances. The others are the contracted auditor Yount, Hyde & Barbour and the EDA’s new accounting firm of Hottel & Willis.  See related story: Warren County will pay $90,000 to ‘outside consultant’ in audit of EDA finances.

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Crime/Court

Questions on McDonald arrest linger as EDA quartet remains jailed at RSW

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Samuel David North after booking into RSW Jail Friday afternoon – Photos RSW Jail website

Following another week of Economic Development Authority Special Grand Jury interviews former EDA Executive Director Jennifer Rae McDonald, her husband, Samuel “Sammy” David North and Donald Fears Poe were booked into the Rappahannock-Shenandoah-Warren County Jail (RSW Jail) in the late afternoon and early evening hours of Friday, August 23.

According to the RSW Jail website, North, 51, was booked into the facility at 5:25 p.m. on two felony counts of Obtaining Money by False Pretenses and one felony count of Money Laundering – “Financial Transaction, proceeds from known felony activity”.

Jail records showed the 42-year-old McDonald being booked at 6:22 p.m. The jail website list of charges against her was 14, the number of her pre-existing charges. So it was not immediately clear if she was facing 14 additional charges or had been booked on a bond violation regarding her 14 pre-existing charges. The Jail website does not list individual case numbers, but only applicable State Codes regarding each charge. So until the case numbers related to her arrest can be verified with court or facility officials the question of McDonald’s arrest on bond violation, new charges, or some combination will remain.

The counts listed against McDonald include six Fraud – Obtain Money by False Pretenses; five Money Laundering counts and three Embezzlement charges. Since the EDA indictments are coming from the Grand Jury sealed there is no further detail on the charges available at this point.

Poe, 61, was shown being booked at 6:31 p.m. Friday evening on one new felony count of Money Laundering – “Financial Transaction, proceeds from known felony activity”. When Poe was arrested on July 23 he was charged with two felony counts of Obtaining Money by False Pretenses and one count of Perjury.

McDonald was arrested on May 24 on eight initial counts. She was twice served with additional charges while incarcerated. After twice being denied bond as a flight risk by Judge Clifford L. Athey, she was granted $50,000 secured bond on July 31, by newly-placed Judge Bruce D. Albertson.

Above, Jennifer McDonald upon being booked into RSW early Friday evening, Aug. 23; below, McDonald after her initial arrest and booking at RSW on May 24.

The special grand jury that has handed down criminal charges, now against four people, McDonald, her former EDA Administrative Assistant Michelle “Missy” Henry, business partner Donald Poe and now her husband, was empanelled within a day of the EDA’s initial $17.6 million civil suit being filed on March 26. The amount of assets seeking recovery has since been raised to over $20 million.

A press release issued today indicated the EDA grand jury has requested a six-month extension to continue its inquiry into March of next year. It was also requested that Assistant Warren County Commonwealths’ Attorney Bryan Layton, who has worked with his boss Brian Madden on the EDA Special Grand Jury inquiry, continue as the lead prosecutor of the grand jury as Commonwealth’s Attorney Madden prepares to take a seat on the judicial bench.

McDonald was the central figure in the nine defendant EDA civil action of March 26. Other defendants included McDonald’s two real estate companies, D’BOYZ and MoveOn8, ITFederal LLC and its CEO Truc “Curt” Tran; Earth Right Energy LLC and its principals Poe and Justin Appleton and the late Warren County Sheriff Daniel McEathron. McEathron passed away on May 28 is what Virginia State Police classify as “an unattended death with a firearm nearby”.

Like McDonald, after spending some time in jail, both Henry and Poe were granted secured bonds. Henry was granted $2500 unsecured bond on July 23 after twice having a bond hearing continued in the wake of her June 24 arrest. Henry remains charged with two felony embezzlement charges related to the EDA’s involvement in the B&G Goods small business loan and asset disbursement upon its November 2016 closing.

As noted in a related story, B&G Goods registered agent and co-owner William Lambert became the fourth person arrested on EDA-related charges Friday.

UPDATE: B&G Goods William Lambert makes it four EDA arrests on August 23

McDonald and Poe were granted $50,000 and $20,000 secured bonds by Judge Bruce D. Albertson on July 31. Poe was arrested on July 23 on two financial and one perjury count related to EDA affairs.

No hearing dates were yet posted for McDonald, North, Poe or Lambert. However, presiding EDA case Judge Albertson is based in Harrisonburg, complicating bond hearing scheduling. He took over EDA cases when all county judges recused or indicated they were on the verge of recusal due to familiarity with people involved in the EDA sphere or other aspects of the investigation. However pending his promotion to the Virginia State Appeals Court, Judge Athey has continued to preside over the EDA Special Grand Jury inquiry as indicated by his signature on the August 21 extension and prosecutor orders.

In past hearings Albertson has indicated the possibility of presiding by conference call on basic matters.

Donald Poe upon becoming the third of four EDA defendants booked into RSW Jail the late afternoon and early evening of Aug. 23.

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Crime/Court

UPDATE: B&G Goods William Lambert makes it four EDA arrests on August 23

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William “Billy” Waco Lambert. Photo courtesy of RSW Jail.

When it rains it pours – and it is raining in Economic Development Authority criminal indictment world this Friday, August 23. Former B&G Goods co-owner and registered agent William “Billy” Waco Lambert made it four people arrested, so far, today on sealed indictments handed down by the Warren County investigating criminality related to the EDA financial fraud investigation.

Lambert, believed to be a former fiancé of a McDonald sister, was booked at RSW Jail at 7:36 p.m. Friday evening. He is charged with two felony counts of Fraud – Obtain Money by False Pretenses and one count of Money Laundering – Financial Transaction, proceeds from known felony activity. Those charges are identical to the three Jennifer McDonald’s husband “Sammy” North was booked on just over two hours earlier, though whether they are directly or indirectly related is unknown.

Like others arrested Friday Lambert is thus far being held without bond pending a hearing date.

B&G Goods was the first business the EDA set up with a small business loan in the now-controversially purchased old Stokes Mart building at 504 East Main Street. The aftermath of selling off business assets following its November 2016 closing and investing in the business appears to be at the root of charges against former EDA Administrative Assistant Michelle “Missy” Henry.

There is a seven-page section devoted to B&G Goods/Stokes Mart in the Cherry Bekaert financial fraud working papers summary.

It also appears that from how new indictments are being posted in the North, Poe and Lambert bookings at RSW Jail that Jennifer McDonald may be facing 14 new indictments today on top of the 14 she had already been arrested and released on bond on.

This developing story will be updated or augmented by additional stories as information becomes available.

McDonald, husband, Poe booked into RSW Jail Friday afternoon, August 23

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Crime/Court

McDonald, husband, Poe booked into RSW Jail Friday afternoon, August 23

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Samuel David North after booking into RSW Jail Friday afternoon – Photos RSW Jail website

Following another week of Economic Development Authority Special Grand Jury interviews former EDA Executive Director Jennifer Rae McDonald, her husband, Samuel “Sammy” David North and Donald Poe were booked into the Rappahannock-Shenandoah-Warren County Jail (RSW Jail) in the late afternoon and early evening hours of Friday, August 23.

According to the RSW Jail website, North was booked into the facility at 5:25 p.m. on two felony counts of Obtaining Money by False Pretenses and one felony count of Money Laundering – “Financial Transaction, proceeds from known felony activity”.

Jail records showed McDonald being booked at 6:22 p.m. The jail website list of charges against her remained at 14. So it was not immediately clear if she was facing additional charges or had been booked on a bond violation. A call to the jail booking department indicated that online buffering of information on McDonald could indicate she was still being processed into the jail. The counts against McDonald include six Fraud – Obtain Money by False Pretenses; five Money Laundering counts and three Embezzlement charges. Since the EDA indictments are coming from the Grand Jury sealed there is no further detail on the charges available at this point.

Poe was shown being booked at 6:31 p.m. Friday evening on one count of Money Laundering – “Financial Transaction, proceeds from known felony activity”.

McDonald was arrested on May 24 on eight initial counts. She was twice served with additional charges while incarcerated. After twice being denied bond as a flight risk by Judge Clifford L. Athey, she was granted $50,000 secured bond on July 31, by newly-placed Judge Bruce D. Albertson.

Earlier mug shot of Jennifer McDonald while initially incarcerated in July

The special grand jury that has handed down criminal charges, now against four people, McDonald, her former EDA Administrative Assistant Michelle “Missy” Henry, business partner Donald Poe and now her husband, was empanelled within a day of the EDA’s initial $17.6 million civil suit being filed on March 26. The amount of assets seeking recovery has since been raised to over $20 million.

A press release issued today indicated the EDA grand jury has requested a six-month extension to continue its inquiry. It was also requested that Assistant Warren County Commonwealths’ Attorney Bryan Layton continue as the lead prosecutor of the grand jury as Commonwealth’s Attorney Brian Madden prepares to take a seat on the judicial bench.

McDonald was the central figure in the nine defendant EDA civil action. Other defendants included McDonald’s two real estate companies, D’BOYZ and MoveON8, ITFederal LLC and its CEO Truc “Curt” Tran; Earth Right Energy LLC and its principals Poe and Justin Appleton and the late Warren County Sheriff Daniel McEathron.

Like McDonald, after spending some time in jail, both Henry and Poe were granted secured bonds. Henry was granted $2500 unsecured bond on July 23 after twice having a bond hearing continued in the wake of her June 24 arrest. McDonald and Poe were granted $50,000 and $20,000 secured bonds by Judge Bruce D. Albertson on July 31. Poe was arrested on July 23 on two financial counts related to EDA affairs.

No hearing dates were yet posted for McDonald, North or Poe.

Donald Poe upon becoming the third EDA defendant booked into RSW Jail the early evening of Aug. 23.

B&G Goods William Lambert makes it four EDA arrests on August 23

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EDA in Focus

EDA Reform Committee weighs options as information being assembled

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The EDA Reform Committee gets down to business – Royal Examiner Photos/Roger Bianchini. Video by Mark Williams, Royal Examiner.

The committee grown out of the first full joint Town-County meeting to discuss the future of the Economic Development Authority held its first meeting at 5:30 p.m. Thursday afternoon, August 22, at the Front Royal Town Hall.

Among topics of discussion were:
– election of a chairman;

– the “Pros and Cons of limiting the EDA mission”;
– “Types of EDA Structures and Relationships in Virginia and Nationally”;
– “How to dissolve the EDA legally”;
– The “EDA filing bankruptcy”;
– And the advisability of separate County, EDA legal counsel.

The short answers were: Archie Fox; probably a good idea to focus on commercial and industrial recruitment and facilitating a positive environment for existing businesses; regional associations and independent ones; probably cannot be done within the existing financial situation but long run make EDA employees County staff; not enough info to determine an answer but probably not; and perhaps separate counsel as a short term trial in the wake of current County-EDA Attorney Dan Whitten’s pending departure for another job on September 13 with his assistant on maternity leave until mid October.

Soon-to-be-departed for other horizons County-EDA Attorney Dan Whitten, left, Committee Chair Archie Fox and new EDA Executive Director Doug Parsons listen to the noise from the other side of the table.

Some public skepticism greeted the announcement of the committee’s makeup of the Town Manager and County Administrator, County and Town Attorneys, EDA Executive Director and one representative of both the Front Royal Town Council and Warren County Board of Supervisors.

And while those two elected municipal officials and appointed administrative and legal staffers may be best positioned bureaucratically to develop a game plan to guide the EDA forward or not, it was their presence in their positions in recent years – save new EDA Executive Director Doug Parsons – as the EDA financial fraud scandal was allegedly developing under their collective noses that contributed to any public perception that a municipally-led committee might not be best qualified to reach a permanent solution to see past mistakes are not repeated.

Perhaps in reaction to such public skepticism, Interim Front Royal Mayor Matt Tederick told Royal Examiner in a recent video interview that he plans to suggest creation of a citizen committee to review the EDA Reform Committee findings.

Interested spectators included six of the seven EDA Board of Directors, from left in back row are Greg Harold and Ed Daley, and in front of them from left, Tom Patteson, Jorie Martin, Jeff Browne and Gray Blanton – only Mark Baker was absent.

But judge for yourself – watch the committee, whose name newest EDA Board member Jorie Martin suggested at Friday morning’s monthly EDA meeting be considered for a change, get their feet wet in establishing what went wrong in the past and how such mistakes can avoid being repeated in the future as the EDA board and staff move to right the ship of community economic development in this Royal Examiner video (And Jorie, we have a name suggestion not so reminiscent of “Reform School” – how about The EDA Steering Committee? After all, they are steering toward a plan of action.)

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EDA in Focus

Bryan Layton appointed to serve as the Special Counsel to assist the Special Grand Jury

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Bryan Layton, Assistant Commonwealth Attorney for Warren County

The Warren County Circuit Court released this today:

On this 21st day of August, 2019, came the Special Grand Jury, by and through their foreman, Juror 158, and move this Honorable Court to appoint Bryan Layton, Esquire to serve as the Special Counsel to assist the Special Grand Jury in its deliberations and to coordinate with the Warren County Commonwealth Attorney’s office, or any successor designee of that office to assist
with the prosecution of those individuals and or entities to which a True Bill was or will be returned;

Whereupon, the Court was advised that the current Commonwealth Attorney, Brian Madden, will be elevated to the Circuit Court bench on September 1, 2019 and Bryan Layton will serve as Commonwealth Attorney for Warren County until a newly elected Commonwealth Attorney for Warren County assumes that office. Any newly elected Commonwealth Attorney or their designee will be wholly unfamiliar with the activities of the Special Grand Jury and the ends of justice dictate that Mr. Layton continue in his role with the Special Grand Jury. The Special Counsel will coordinate with the newly elected Commonwealth Attorney in the prosecution of any matters arising as a result of the activities of the Special Grand Jury. Further, Mr. Layton has agreed to serve as Special Counsel to the Special Grand Jury and to coordinate and assist in any prosecutions arising therefrom at the rate of $90.00 per hour to commence at such time as he is no longer employed by the Warren County Commonwealth Attorney’s office;

Wherefore, it is ADJUDGED, ORDERED, and DECREED that upon leaving the Warren County Commonwealth Attorney’s office, Mr. Layton shall be employed as Special Counsel to assist the Special Grand Jury and coordinate with the Warren County Commonwealth Attorney’s office or their designee in the prosecution of any indictments arising out of the Special Grand Jury at the rate of $90.00 per hour.

Clifford L. Athey, Jr., Judge

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EDA in Focus

Judge Athey extends Special Grand Jury to March 31, 2020

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The Warren County Circuit Court released this today:

On this 21st day of August, 2019, came the Special Grand Jury, by and through their foreman, Juror 158, and moved this Honorable Court to extend the duration of the Special Grand Jury from September 30, 2019 to March 31, 2020;

Whereupon, the Court was advised that to date, the Special Grand Jury has interviewed over sixty (60) witnesses. The movant further represented that the Special Grand Jury has received in evidence over ten thousand documents and returned eighteen true bills against three individual defendants. As a result of the complexity of the matters investigated and the voluminous nature of the evidence collected, the Special Grand Jury would require additional time to review the evidence, issue additional true bills, if necessary, and prepare its Final Report;

WHEREFORE, it is hereby ADJUDGED, ORDERED and DECREED that the Special Grand Jury shall be extended from its current end date of September 30, 2019, until March 31, 2020, so that the Special Grand Jury may consider any additional testimony, review any documentation, and issue any additional true bills, and prepare its Final Investigatory report pursuant to its statutory authority.

Clifford L. Athey, Jr., Judge

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Upcoming Events

Aug
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4:30 pm Front Royal Salvation Army Corps... @ Salvation Army
Front Royal Salvation Army Corps... @ Salvation Army
Aug 24 @ 4:30 pm – 8:30 pm
Front Royal Salvation Army Corps BBQ Cookout @ Salvation Army
The Front Royal Salvation Army Corps will host a BBQ Cookout on Saturday, August 24, 2019, from 4:30 pm to 8:30 pm at 296 South Street, Front Royal. A BBQ chicken meal, including chips and[...]
Aug
27
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1:30 pm Botanicals in Watercolor I @ Art in the Valley
Botanicals in Watercolor I @ Art in the Valley
Aug 27 @ 1:30 pm – 4:00 pm
Botanicals in Watercolor I @ Art in the Valley
This four week course with the instructor, Elena Maza, will deal with the basic three-primary color palette, different pigments and how they interact, how to mix all colors from three primary colors, how to apply[...]
Aug
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1:00 pm Substance Abuse and Recovery Summit @ Mountain Home Bed and Breakfast
Substance Abuse and Recovery Summit @ Mountain Home Bed and Breakfast
Aug 29 @ 1:00 pm – 3:00 pm
Substance Abuse and Recovery Summit @ Mountain Home Bed and Breakfast
The McShin Foundation and RSW (Rappahannock, Shenandoah, and Warren County) Regional Jail would like to invite you to our substance abuse and recovery summit to be held on August 29, 2019, in Front Royal, Virginia.[...]
Aug
31
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1:00 pm DJ Skyhigh’s End of Summer Blast @ Warren County Fair
DJ Skyhigh’s End of Summer Blast @ Warren County Fair
Aug 31 @ 1:00 pm – 9:00 pm
DJ Skyhigh's End of Summer Blast @ Warren County Fair
Come join DJ Skyhigh for his end of summer blast. Lisa Bell will be hosting wine tastings (at an additional charge) of over 50 international wines. Wines may also be purchased by the bottle to[...]
Sep
3
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1:30 pm Watercolor Landscapes @ Art in the Valley
Watercolor Landscapes @ Art in the Valley
Sep 3 @ 1:30 pm – 4:30 pm
Watercolor Landscapes @ Art in the Valley
This four week course with instructor Elena Maza will focus on learning basic skills to create watercolor landscape paintings: basic composition and use of color and value to create a sense of depth and distance.[...]
Sep
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1:30 pm Botanical Drawing @ Art in the Valley
Botanical Drawing @ Art in the Valley
Sep 4 @ 1:30 pm – 4:30 pm
Botanical Drawing @ Art in the Valley
Learn and practice the art of botanical drawing in pencil with local artist and instructor Elena Maza. This four session course will focus on learning basic drawing skills as applied to botanicals: basic line drawings[...]
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10:00 am SHS Marching Band Mattress Fundr... @ Skyline High School
SHS Marching Band Mattress Fundr... @ Skyline High School
Sep 7 @ 10:00 am – 5:00 pm
SHS Marching Band Mattress Fundraiser @ Skyline High School
Skyline High School Marching Band is having a mattress sale fundraiser on Saturday, September 7, 2019, from 10 a.m. to 5 p.m. at Skyline High School (151 Skyline Vista Drive, Front Royal, Virginia). There will[...]
12:00 pm 2019 NFL Kick Off Party @ Sly Fox Golf Club
2019 NFL Kick Off Party @ Sly Fox Golf Club
Sep 7 @ 12:00 pm – 8:00 pm
2019 NFL Kick Off Party @ Sly Fox Golf Club
Golf – “Captains Choice Format” 12pm Shotgun “Tail Gate” Food and Drinks – 5pm to 8pm Golf + Food & Drinks $45 Tail Gate Food & Drinks Only $15
1:00 pm Strokes of Creativity: 1-year ce... @ Strokes of Creativity
Strokes of Creativity: 1-year ce... @ Strokes of Creativity
Sep 7 @ 1:00 pm – 6:00 pm
Strokes of Creativity: 1-year celebration @ Strokes of Creativity
Join us for our 1-year celebration on Sept. 7 from 1-6 pm. We will have demos, and Artist meet and greets. Unique and one of kind items, face painting, crafts and Chase from Paw Patrol will[...]
6:00 pm FRUMC Celebrates Homecoming @ Front Royal United Methodist Church
FRUMC Celebrates Homecoming @ Front Royal United Methodist Church
Sep 7 @ 6:00 pm – 8:00 pm
FRUMC Celebrates Homecoming @ Front Royal United Methodist Church
In tandem with the 110th anniversary of the church building, the Front Royal United Methodist Church will host Homecoming ceremonies on Saturday and Sunday, September 7th and 8th. Five previous pastors have agreed to return[...]