Attorneys for multiple Front Royal-Warren County Economic Development Authority civil litigation defendants argued for dismissal of their clients’ inclusion in that list in Warren County Circuit Court on Thursday, December 12. After hearing over 4-1/2 hours of testimony surrounding a 45-minute lunch break, Judge Bruce D. Albertson took those arguments and plaintiff counsel counter-arguments under advisement.
After an explanation to defendants present, including Donald Poe, April Petty and Jesse Poe, about the reason for the time he will take before returning to court to make a ruling on their and other defendants’ counsel arguments, Albertson set a date of January 10, at 2:30 p.m. to make his ruling.
That is the same date the judge continued a scheduled Show Cause hearing on a Civil Contempt charge against primary EDA civil and criminal defendant Jennifer McDonald earlier during the Thursday docket. McDonald’s civil contempt hearing will follow an already scheduled McDonald criminal hearing on the 1 p.m. docket on January 10.
McDonald’s criminal case attorney Peter Greenspun informed Albertson he was taking over his client’s civil case as well in the wake of the withdrawal of her former civil attorney Lee Berlik.
Greenspun told the court he needed additional time to familiarize himself with the civil aspects of McDonald’s legal situation.
A third EDA-related hearing on Thursday morning’s docket was Donald Poe counsel William Ashwell’s motion to Quash a Perjury charge regarding the Earth Right Energy principal’s testimony to the EDA Special Grand Jury. That case went forward first on what was slated to be an 8 a.m. start to Thursday’s docket, delayed by late arrivals of a court reporter and McDonald’s Northern Virginia-based attorney.
After hearing Ashwell and new Rockingham County prosecutor’s arguments, Albertson deferred a ruling on dismissal of Poe’s perjury charge to the January 22 date on which that trial is scheduled to begin.
Ashwell told the court that his client was the one defendant “not on the continuance train” with an originally slated perjury trial date of December 6 having been moved to a three-day slot in January to accommodate the recent placement of a new prosecutor’s office to handle all the EDA criminal cases. Incoming Warren County Commonwealth’s Attorney John Bell has recused himself from EDA cases and current County Commonwealth Attorney Bryan Layton has withdrawn due to his pending departure from the office.
In addition to McDonald on her case and Donald Poe, April Petty and Jesse Poe who were present with counsel Thursday, EDA civil defendants represented in Thursday’s Demurrer motions hearing were Truc “Curt” Tran and ITFederal and Poe’s Earth Right Energy Solar Panel Installation company.
The basis of those defense counsel arguments for dismissal of their clients from the civil case revolved around several points. Primary among those is the plaintiff notion of an overarching conspiracy that somehow links the various defendants to central figure and former EDA Executive Director McDonald; and that there were definable contractual breaches by those defendants making them individually liable for funds that came their way through McDonald.
Lead plaintiff attorney Cullen Seltzer argued that there did not have to have to be direct knowledge among all defendants of each interlocking conspiracy McDonald is alleged to having been a party to for that conspiracy to exist.
He used an analogy to a gang that planned to rob every Bank of America in Richmond, saying a gang member assigned to one “bank job” did not have to know the detail of every other bank robbery to be criminally liable for the entire take.
Seltzer dismissed defense arguments that “McDonald is a rouge tornado dumping all this EDA money into all these pockets” without the recipients’ knowledge that something illegal was transpiring that they were beneficiaries of.
However, Jesse Poe and April Petty’s attorney William Schmidheiser argued that such a conspiracy theory did not apply to his clients, whose alleged “unjust enrichment” did not go directly to them, but rather to real estate companies handling the closings on their homes.
Schmidheiser noted his clients’ limited incomes, telling the court the reason he represented them both was a necessity to pool their resources to finance their defenses. He called their being packaged as part of an alleged $21 million civil suit conspiracy for mortgage payoffs of $125,000 (Petty) and $280,000 (Jesse Poe) was, short of the loss of a child or a cancer diagnosis, one of the worst things that could happen to an average person.
He said that while there might be “unjust enrichment” claims the plaintiff could argue – we’ll deal with those down the road, he told the court – the circumstance of his clients’ involvement distanced them from the plaintiff EDA counsel’s conspiracy theory.
He compared his clients’ circumstance to that of the casino McDonald is alleged to have lost at least $750,000 gambling at, noting that while the casino received cash from McDonald that could have been EDA assets, the casino was not a defendant.
In arguing that Earth Right Energy’s (ERE) contracts with the EDA through its then-executive director were valid and binding, attorney Ryan Huttar told the court that at the time those contracts were enacted “Jennifer McDonald (was) the EDA”.
That was a point the EDA legal team disputed, noting that large dollar (over $10,000) transactions had to be approved by the EDA Board of Directors, which they stated, did not happen.
ITFederal attorney Brandon Elledge argued that the EDA Board did approve the $10 million dollar loan it is seeking recovery of from his client, as well as the subsequent vendor payments of $1.4 million also in dispute.
Sands Anderson plaintiff counsel countered that the loan and the vendor payments were received under false pretenses concocted by Tran and McDonald in concert.
Elledge also stressed that Tran remains current on his loan payments, and that no proof had been offered that his client personally benefited from the payments, rather than professionally as intended. Oddly however, the Deed of Trust on the property was amended so that Tran only has to spend $2 million of the $10 million loan on the Front Royal property.
In setting the January 10 date for a decision on the motions to dismiss the defendants from the civil suit, Judge Albertson compared himself to a student.
“The attorneys teach us their view of what the law is” related to their cases “and it will take several weeks to fact check their arguments – I will treat this seriously, please be patient,” he asked the defendants present.
Poe joins EDA civil defendants in motions to nullify civil liability verdicts; Tran counsel granted additional time to file their motion to overturn jury verdict
After expressing some initial reluctance to invest more in legal fees attempting to overturn a Warren County Civil Court jury’s ruling of approximately $1.3 million in base ($945,000) and punitive ($409,800) damages against him and his Earth Right Energy (ERE) company, Donald Poe joined the line of EDA civil case defendants seeking to have Judge Bruce D. Albertson overturn jury liability verdicts rendered in July. The Poe/ERE “Motion To Set Aside Jury Verdict Or In The Alternative To Award A New Trial” was received and filed in Warren County Circuit Court Clerk’s Office on Tuesday, September 6.
The rationale for that motion was along the lines of previous filings by counsel for April Petty, William Lambert, and a still pending one for Truc “Curt” Tran. The defendants’ contention is that the jury verdicts were based on evidence that did not meet a civil code standard to justify the finding of liability in each defendants’ case. Similar motions to strike plaintiff EDA evidence and their cases against the defendants were made by defense counsel and denied at the outset of several of those July trials. To those arguments forwarded by defense counsel on several occasions, Judge Albertson responded that it was “for the jury to decide” the relative weight of evidence to be presented.
In a related development, on August 25 over the objection of plaintiff EDA counsel, Judge Albertson granted Tran/ITFederal counsel’s request for additional time to complete its filing for overturning of the jury’s finding of compensatory liability of about $12 million-plus some interest against Tran and ITFederal. The judge set a new filing schedule of September 15 for defense filings, plaintiff responses by October 17, and defendant replies to plaintiff’s response by October 27. An initial defense motion to overturn filing date was set for 31 days from the July 28 jury verdict in that case. Running towards an August 28 deadline on that schedule, Tran counsel sought the additional time, as noted above, granted over the plaintiff’s objection.
As part of his order granting the filing extension for Tran/ITFederal, Judge Albertson ordered the defendants not to move substantial company or personal assets during the moves toward a final court ruling on the verdict: “Tran and IT Federal (on behalf of itself and on behalf of its wholly-owned subsidiary Lewisburg Way, LLC) shall not sell 943 Happy Creek Road before the court enters its final order, consistent with Code 55.1-400, which precludes fraudulent conveyances,” the judge began, adding, “Mr. Tran and IT Federal shall not dispose of, encumber, or waste any assets of IT Federal. In the same vein, IT Federal and Tran shall not gift, convey, assign, transfer or otherwise dispose of, encumber, or waste any personal assets to delay, hinder, or defraud the Warren EDA as a creditor.”
Motions to set aside the jury verdict of $125,000 of compensatory liability in April Petty’s case was filed with the court on July 28; and in William Lambert’s jury finding of $350,000 of compensatory liability, the motion to overturn was filed on August 18.
And the jury trial of Samuel North, cancelled in July following North’s filing of bankruptcy, has been rescheduled for October 25, beginning at 8:30 a.m. North is former EDA Executive Director Jennifer McDonald’s husband. The central figure in the EDA “financial scandal”, McDonald reached a no-fault settlement agreement in her civil liability case with the FR-WC EDA. She agreed to turn over $9 million in assets, largely real estate, to the EDA to settle their claims against her; while admitting no fault in her acquisition of those assets.
She still is facing criminal trial in federal court in the Western District of Virginia on multiple charges related to the investigation into EDA finances during her executive director’s tenure. Due to its complexity and the amount of involved evidence – cited at over a million pages of documentation – that trial originally scheduled for as many as five weeks this fall, has been pushed into May 2023.
See trial and verdict stories on the Royal Examiner website front page under the NEWS banner at sub-section “EDA IN FOCUS“.
FR-WC EDA finalizes $5.7-million sale of Baugh Drive warehouse to Shahi Foods
The Front Royal-Warren County Economic Development Authority (FR-WC EDA) is pleased to announce that Shahi Food, LLC is the new owner of 426 Baugh Drive in Stephens Industrial Park. The new property owners will relocate and expand their successful family-owned business to Warren County.
The FR-WC EDA originally purchased the property in 2018 and has since been exercising thorough due diligence and recruitment, which led to today’s announcement the contracted $5.7M sale of the property has been finalized. Shahi Food, LLC projects a $7M capital investment and a 5-year employment projection of 100 individuals and begins manufacturing operations at the Baugh Drive site in late 2022/early 2023.
Shahi is currently based in a nearby county and has been in business for over 30 years. They produce an ethnic ice cream bar called Shahi Kulfi in 6 flavors – chocolate, strawberry, cream, pistachio, mango, and coconut. They currently distribute to over 2000 retail outlets in 20 states and have a large market presence in New York, New Jersey, Texas, Ohio, and Virginia. Shahi is approved for retail sales in large grocery and warehouse stores in the US and has received approvals for European distribution of their products. Shahi Food, LLC’s parent company is Shadchem—an international food and consumer products group with a presence in over 16 countries.
“This announcement is the culmination of an intentional and active effort by the FR-WC EDA Board of Directors to bring companies to Warren County that provide quality jobs and values to our
community,” said EDA Chair Jeff Browne. “The sale not only brings jobs and investment to the area, but the proceeds allow the FR-WC EDA to pay down other debt obligations.”
“The County of Warren has had a long-standing partnership with the FR-WC EDA,” said County Administrator Dr. Edwin Daley. “We are incredibly excited about the recent announcement and look forward to having Shahi Food, LLC in the Warren County community for many years.”
About the Front Royal-Warren County Economic Development Authority
The Front Royal-Warren County Economic Development Authority (FR-WC EDA) aims to strengthen our community’s economic growth by fostering a friendly business environment and providing services to create and retain quality jobs in Warren County. The Authority also supports community tourism, recreation, and arts & cultural initiatives to offer a better quality of life for the County’s residents, workers, and visitors. Coordination with the Board of Supervisors, County staff, the Town of Front Royal, and State agencies are integral to promoting economic development and tourism throughout Warren County.
For more information, contact Jeffrey Browne, FR-WC EDA Board of Directors Chair, at 540-635-2182 or email@example.com.
Warren County EDA tackles multi-faceted August meeting Action Agenda
The Front Royal Warren County EDA held its monthly meeting on Friday, August 26, 2022, at 8 a.m. All five Board members, legal counsel, and the County Director of Economic Development were present.
The monthly meeting began with the election of officers, which was approved unanimously. The new officers are Chair Jeff Browne, Vice Chair Scott Jenkins, Treasurer James Wolfe, and Secretary Marjorie Martin.
As part of the Executive update, member Jim Wolfe suggested a future board retreat to discuss updating the Authority’s strategic plan. Jorie Martin provided an overview of an existing insurance policy for the FR-WC EDA office building at 400 Kendrick Lane. The Board approved restructuring the policy to provide appropriate coverage and cost savings on the space.
The Chair provided an update on the lease of Suite C at 400 Kendrick Lane. C-CAP will be occupying the suite for their operations starting September 1st.
Jeff Browne summarized a meeting he had with Chair of the Front Royal Economic Development Authority (FREDA), Rick Novak, who was in attendance for the meeting. One of the issues discussed that both Chairs agreed on is a joint EDA retreat to have an opportunity to meet each other in a less formal setting. Novak also provided information on the upcoming Festival of Leaves taking place in Downtown Front Royal on Saturday, October 15th.
Treasurer, Jim Wolfe, provided an update on monthly financial statements and the small business loan committee re-establishment.
The Warren County Director of Economic Development, Joe Petty, provided an update on current activities related to prospects, small business loans, annual audits, and marketing.
EDA’s legal counsel presented a by-law revision that would allow electronic meetings as permitted by the Virginia Code; and additional recommendations by the ad hoc committee consisting of Jorie Martin and Greg Harold. Upon review of the revisions, the Board unanimously adopted the revisions.
As part of new business, the Board approved rescheduling the September meeting, which will be held on Monday, September 26, 2022, at 8 a.m. at the Warren County Government Center Caucus Room.
The Board concluded the meeting with a closed session to discuss business opportunities, with no new business following the closed session.
EDA Board Chairman Jeff Browne reacts to July civil litigation results ordering total of over $13.35 million paid to the County Economic Development Authority
As noted in our lead story on the “Warren Economic Development Authority” (EDA) versus Truc “Curt” Tran and his ITFederal LLC company civil liability case result (See: Jury awards WC EDA $11.9 million-plus in civil compensatory claims against ITFederal and Truc ‘Curt’ Tran), involved players on the plaintiff’s side deferred to current EDA Board Chairman Jeff Browne for a reaction, not only to the Tran/ITFederal result, but a month in which four civil liability cases went the EDA’s way. After a day of reflection on this month’s civil liability trials, much of which he watched in the courtroom, often with other EDA board members, this is what Browne told Royal Examiner:
“As part of the Jennifer McDonald lawsuits, the EDA successfully sued six defendants this month in four civil jury trials and was awarded about $13 million in compensatory damages, $400,000 in punitive damages, and $75,000 in damages for statutory conspiracy. There will be additional civil trials in March 2023.
“The EDA’s main responsibility in these lawsuits is to recover assets that rightfully belong to the EDA and ultimately to the residents of Warren County. It’s a work in progress, but I’m pleased with the outcomes. Every defendant was found liable on multiple charges. Every defendant has to pay. A jury found that the EDA Board of Directors with oversight responsibility of Jennifer McDonald wasn’t negligent in retaining her as it took immediate steps after finding solid evidence of her misbehavior.
“But that isn’t the whole story. Members of the EDA Board were present on every day of every trial. We were impressed with the juries and Judge Albertson. Jury members listened attentively, took notes, and showed in their verdicts that they had a command of the facts in each case. Judge Albertson was fair to both sides of each case and did a good job of managing each trial. Prior members of the EDA Board, prior staff EDA members, a former county administrator, and former members of the Warren County Board of Supervisors all stepped up to testify and do their civic duty. We can be proud that our judicial system still works.
“The criminal process moves forward in other venues. In the meantime, some measure of justice is present in the jury verdicts in Warren County this month. For that, we are grateful.”
Coupled with the out-of-court “no-fault” settlement agreement with McDonald for an estimated $9 million in real estate assets, the courts have now ordered the return of $22 million to $23 million in assets to the EDA. At various points in the investigation into alleged embezzlement and misdirection of EDA assets between 2014 and 2018, the total involved amount has been cited from $21 million to $26 million. There have been significant legal fees involved, perhaps $6 million or more. But in the wake of this month’s results, it appears the EDA’s contracted civil counsel from the Sands Anderson law firm of Richmond are earning that money.
Asked for a reaction to the verdict, Tran and his attorney Gregory Melus declined comment. As noted in the above linked story on the verdict, Melus notified the court of his intention to file a motion to overturn the verdict as not supported by the evidence presented at trial, as have the other three involved civil case defense attorneys.
Jury awards WC EDA $11.9 million-plus in civil compensatory claims against ITFederal and Truc ‘Curt’ Tran
After five hours of deliberation beginning shortly after 9 a.m., at 3:30 p.m. Thursday afternoon, July 28, a Warren County Circuit Court civil case jury awarded the “Warren Economic Development Authority” (aka EDA, WC EDA, FR-WC EDA) a total of $11,919,313.38, plus some interest payments from defendants Truc “Curt” Tran and his ITFederal LLC company. The finding of liability against the defendants related to exchanges of money for Tran and ITFederals’ plan to develop a 30-acre parcel at the 148-acre Royal Phoenix Business Park portion of the former Avtex Superfund site in Front Royal. That seven-person civil case jury also dismissed all counterclaims by co-defendants Tran and ITFederal related to breach of contract and surrounding claims against the EDA.
However, the jury did not find the defendants liable on claims of Conspiracy and Fraud that could have led to significant punitive damages up to $350,000, or as high as triple the compensatory claim of $11.9 million if found guilty of statutory conspiracy indicating malice against the plaintiff. Tran was found liable on claims of Conversion, Unjust Enrichment, and Ultra Vires, the latter actions outside the authority of involved officials. ITFederal was found liable on claims Conversion, Unjust Enrichment, Ultra Vires, and Breach of Contract.
The breakdown of liability of the defendants was $1,499,986 against Tran, plus 3-1/4 years of interest on that amount accumulated since the March 2019 filing of the EDA civil actions against defendants alleged to have worked with former EDA Executive Director Jennifer McDonald between 2014 and 2018 to defraud the EDA out of an estimated $21-million. The $11.9-million claim of compensatory damages against Tran and ITFederal was the largest single portion of the EDA civil liability actions for recovery of lost assets. With approval of a bankruptcy court judge, McDonald settled EDA claims against her in an out-of-court “no-fault” settlement for what was cited as $9 million in real estate assets.
From testimony over four days of trial in the Tran/ITFederal liability case that $1.499-million finding against Tran related to EDA payments made to Tran under the pretense it was front money that would be reimbursed to the EDA by a $1.5 million Virginia Economic Development Partnership (VEDP) grant that was never acquired, or even applied for.
The finding of liability for $10,419,327.38 against ITFederal revolved around the $8,419,327.38 balance of a $10-million loan/promissory note the EDA gave the company to begin development of the ITFederal parcel behind the EDA offices in the old Avtex Administration building off Kendrick Lane. As noted in previous stories (see LINKS at end of story) on testimony and evidence presented during the trial, ITFederal was presented to the EDA Board of Directors in 2015-16 by then Sixth District Congressman Robert Goodlatte as not really needing the loan. Past EDA board members Greg Drescher and Ron Llewellyn testified that Goodlatte suggested the loan as a public relations move to illustrate Virginia’s positive work with the private sector to redevelop a former federal Superfund “brownfield” site.
Consequently, despite the written-in 30-year payback loan term, EDA officials believed it was actually being done as a short-term public relations effort, and would be paid back in a matter of months when what they believed was an existing $140-million ITFederal contract with the Nuclear Regulatory Commission (NRC) kicked in. A McDonald representation to her board that Tran would become an “anonymous donor” of $8-million to a proposed Criminal Justice Academy project then being worked on by the EDA, was seen as the start of that early repayment, the former EDA board members testified.
It appears this civil case jury, as three before it this month, have rejected a defense theory of the case asserting that the defendants were unwitting victims of McDonald’s alleged lies concerning the movement of EDA assets, just as the EDA was victimized. Plaintiff attorneys from the Sands Anderson law firm of Richmond, Va., countered those arguments by asking the jury to “follow the money” to see who benefited from the misinformation they allege McDonald was giving the EDA board, as well as EDA auditors.
During the previous morning session on Wednesday, the two sides presented their final witnesses: for the defense Mark Viola, proprietor of Viola Engineering, who did geo-technical work for Tran on the ITFederal site regarding construction delays related to underground discoveries of old utility piping and substances; and in plaintiff rebuttal to some of the previous day’s defense assertions, former County and EDA attorney Dan Whitten.
Late Wednesday, the court heard motions from both sides to strike the opposition claims against their clients. After listening to extensive arguments from both sides, Judge Albertson denied all motions to strike claims by either side, preferring as he has reviewing similar motions in earlier EDA civil liability cases this month, to allow the jury to make the decision on the substance of each sides’ claims against the other. After adjourning to dinner of pizza ordered to the courthouse for them around 7 p.m., the jury returned at 7:25 p.m. to say they preferred to go home and begin deliberations Thursday morning, which Judge Albertson agreed to.
As the three previous defense attorneys have following findings in the EDA’s favor this month, Tran/ITFederal counsel Gregory Melus notified the court he would file a motion to overturn the jury verdict. Those motions appear based on a defense contention evidence produced at trial was inadequate to justify conviction. A 30/30/10 day filing and response time schedule was set, though plaintiff counsel indicated if Melus needed additional time due to scheduling conflicts, that would not be a problem.
With motions to overturn on the table, counsel for both sides declined comment following Thursday’s verdict. Current EDA Board Chairman Jeff Browne, who observed much of the trial along with board members Jim Wolfe, Scott Jenkins, and Greg Harold, indicated that after speaking with counsel and some consideration he might have a response for the media shortly. See that EDA response in related story posted when available.
EDA civil liability defendant ‘Curt’ Tran on witness stand for over 4-1/2 hours as trial heads into final day
Tuesday, July 26, the third day of the “Warren Economic Development Authority” versus Truc “Curt” Tran and ITFederal LLC civil liability and counter-suit case was highlighted by the defendant’s 4-hours-and-37-minutes on the witness stand. That time started with a 2-hour-25-minute near monologue on direct examination, followed by 1-hour-58-minutes of sometimes contentious cross-examination by EDA co-counsel Lee Byrd and a fortuitously briefer 14 minutes of redirect examination by defense attorney Gregory Melus. On direct examination, Tran recounted his life story, beginning as an 11-to-12-year-old refugee to America in the wake of the Vietnam War and the fall of Saigon, leading into his work in data storage with the federal government and private sector, culminating with his efforts to develop a federally funded data center and import/export business in Front Royal and Warren County.
During that direct examination, Tran managed to recount a series of circumstances involving not only former EDA Executive Director Jennifer McDonald and a lack of supervisory EDA Board of Directors oversight of McDonald, but also shifting federal program guidelines, former President Barack Obama, and failed 2016 presidential candidate Hillary Clinton among reasons his projects here failed. The latter two involved a failure of the federal government during Obama’s presidential tenure to sign into law the Trans-Pacific Partnership (TPP), an international trade agreement that might have helped facilitate the import-export business Tran had hoped to create with his ITFederal company involving the cattle farm production of beef on acreage purchased off Happy Creek Road.
During a sometimes explosive cross-examination, Tran conditionally insinuated that several previous witnesses may have perjured themselves during testimony regarding circumstances of his agreements on the ITFederal project. Those witnesses in the defendant’s crosshairs of scrutiny included former EDA and County Attorney Dan Whitten, former EDA board member Ron Llewellyn, and Virginia Economic Development Partnership (VEDP) official Debbie Melvin.
In fact, Tran appeared to flirt with accusing former U.S. 6th District of Virginia Congressman Robert Goodlatte of, if not perjury, since he was not called as a witness for either side, but potential past lying were testimony from other witnesses, including Whitten, Llewellyn, and Greg Drescher, to be proven true regarding Goodlatte’s lobbying for Tran/ITFederal to receive the $10-million EDA loan for the Avtex site ITFederal project on a short-term basis as a positive public relations initiative for Virginia.
“I never say short-term, I didn’t say that – did he say that?” Tran wondered of multiple witnesses saying Goodlatte presented the $10-million dollar loan for the ITFederal project as a public relations effort to attract more business interest in Virginia rather than a loan Tran and his company actually needed to achieve their planned Avtex site federal data center development. With one defense witness remaining to be called Wednesday, one might wish Goodlatte was that witness to address that question, though he has not appeared on a prospective witness list.
Prior to sending the jury home at 7:02 p.m. Tuesday, Judge Bruce D. Albertson told that jury he anticipated deliberations to be handed over to them no later than early-to-mid-afternoon on Wednesday. Those deliberations involve an EDA base compensatory damage claim of over $ 11 million against Tran/ITFederal, as well as potential punitive damages up to $300,000 or more were the jury to find Tran and his company guilty of statutory conspiracy to defraud the EDA out of assets obtained under alleged fraudulent circumstances. Testimony indicated the defendants’ counterclaim at a base of approximately $4 million, with more at stake punitively as well.