Federal Criminal Prosecution of Former EDA Executive Director Jennifer McDonald Begins

The long and winding road to criminal prosecution of former Front Royal-Warren County Economic Development Authority (FR-WC EDA, EDA) Executive Director Jennifer McDonald, the central figure in the estimated $26-million dollar “financial scandal” still being settled in and out of county Civil and state Appeals Courts, ended on Monday, August 21, at 9 a.m.

That day marked the beginning of the now federal prosecution of McDonald on 34 criminal counts, including bank fraud, wire fraud, money laundering, and aggravated identity theft. Some of these allegations date back to 2014 and others into mid-2018, that time span marking the generally referenced time-frame of McDonald’s alleged misdirection of EDA assets to her personal benefit, as well as to that of alleged co-conspirators. She held her position at the top of the EDA staff hierarchy for about a decade prior to her resignation, submitted on December 20, 2018, as she came under increasing scrutiny by the EDA board and municipal officials for her private sector real estate purchases, among other movements of money.

Jennifer McDonald was on the job with the EDA Board of Directors earlier in 2018, prior to her Dec. 20 resignation under increased scrutiny by that board. Below, the FBI and VSP at the EDA office on April 16, 2019, during a search for potential evidence in criminal prosecutions related to the EDA ‘financial scandal.’ McDonald’s former office had been sealed off as a potential crime scene since shortly after her resignation, filed remotely. Royal Examiner File Photos

Despite plea negotiations referenced by United States District Judge Elizabeth K. Dillon into the last week prior to the trial’s start, jury selection was expected to begin at 9 a.m. Monday. McDonald’s criminal prosecution is now in the hands of the federal 10th Western District of Virginia after transfers through the jurisdiction of state prosecutors’ offices in Warren and Rockingham Counties. The federal trial had been slated to begin May 15. But in the wake of the granting of a continuance from the May starting date requested due to the recovery of some previously misplaced documents among the over one million pages of evidentiary documentation attached to the cases, the trial is now scheduled for August 21 through September 29, 2023. The trial has been designated as “complex” due to the amount of involved evidence. Due to that number, whatever it may have risen to by now, and the number of witnesses involved, the trial has been slated to run for six, possibly seven weeks.

McDonald is the only person charged criminally in federal court thus far. A grand jury in Warren County Circuit Court indicted McDonald and more than a dozen co-defendants in the spring of 2019 on state charges related to her alleged actions. The case was then handed over to a special prosecutor with the Harrisonburg-Rockingham Commonwealth Attorneys’ Office. Criminal charges at the state level against both McDonald and alleged co-conspirators have been dropped at the state level to avoid running over speedy trial statute time-frames that could have allowed defense attorneys to file for dismissal of the charges against their clients. The federal grand jury filed sealed indictments on August 25, 2021. Those indictments were unsealed a week later, on August 31, and McDonald was arrested by federal authorities that day. But she was again released on bond, as she was at the state level following those arrests.

Mug shot of McDonald following one of her two arrests on criminal charges at the state level, prior to the criminal prosecution being turned over to federal prosecutors.

McDonald reached an out-of-civil court settlement with the EDA, turning over an estimated $ 9 million dollars of real estate assets to EDA ownership.

Hopefully, this reporter hasn’t violated any state or federal laws in writing this background story, as he has been subpoenaed as a prosecution witness regarding an interview with McDonald and a subsequent story published in Royal Examiner on February 8, 2018. In that interview, McDonald claimed to have developed a winning system at Charles Town’s Hollywood Casino slot machines that totaled $ 1.8 million dollars in winnings over the previous three years. Unfortunately, until called to the stand and released as a witness following direct and cross-examinations, I will not be allowed in the courtroom during the trial.

In her EDA office in early 2018, Jennifer McDonald flashes what she said were some of the tax receipts issued to her at Hollywood Casino during a 3-year string of claimed slot machine winnings totaling $1.8 million, which she said she largely invested in real estate.

EDA Director Jennifer McDonald parlays casino winnings into real estate investments