Crime/Court
Judge allows Shaw-Sayre communications Discovery, but not third-party
The Warren County Courthouse remains ground zero for EDA-related activity
FRONT ROYAL – Attorneys for Jennifer McDonald, Tom Sayre and one involved third party argued motions related to plaintiff Discovery filings and responses in Warren County Circuit Court late Wednesday morning. The motions involve McDonald’s $600,000 defamation lawsuit against Sayre filed in February.
Five months earlier in September 2018 while McDonald was still EDA executive director, Sayre filed a $25,000 defamation suit against McDonald. Both suits revolve around the name “Tom” accompanied by Sayre’s phone number found in McDonald’s yard following a reported vandalism on her property on June 15, 2017.
At issue Wednesday were responses or a perceived lack thereof to plaintiff McDonald attorney’s request for social media and other electronic communications records of Sayre and that third party, Royal Examiner Editor Norma Jean Shaw.
Sayre’s and Shaw’s first names, as well as Sayre’s phone number and other names and numbers were on a crumpled note pointed out by McDonald to Warren County Sheriff’s Office investigators responding to her report of a rock-throwing vandalism at her home at 9:02 p.m. Thursday, June 15, 2017.
The note portrays a multi-person conspiracy surrounding, not only incidents alleged to have occurred at McDonald’s Faith Way, county home in the May-June 2017 timeframe, but also an alleged May 18, 2017 break-in at the Kendrick Lane EDA office in Front Royal. The latter was a scene at which there was no forced entry apparent. The latter was a scene at which there was no forced entry apparent, and only three staff members, McDonald, Missy Henry and Marla Jones with keys.
The entry is easy if you have a key, as Interim Executive Director John Anzivino illustrates during his brief tenure.
On Halloween Day 2018, McDonald was acquitted of a misdemeanor charge of filing a false police report in the June 2017 vandalism incident in what some cynical observers have called a “Trick or Treat” – as in no available corroborating or motive evidence being presented – prosecution. The case was developed by the Front Royal Police before being turned over the Virginia State Police, based on information received in an already scheduled FRPD interview, at 10:30 a.m. Friday morning, June 16, 2017, with this reporter. That information was that McDonald told Bianchini about the vandalism during a lengthy 3 p.m. meeting in her EDA office the afternoon of June 15, about five to six hours before she reported it occurring.
Among the records McDonald attorney Lee Berlik was seeking in Discovery were three months of social media, online messaging and text communications – May 1 to July 31, 2017 – between Shaw and Sayre, Shaw and Mark Egger, Shaw and a colleague at Royal Examiner (who do you think) and Shaw and Commonwealth’s Attorney Brian Madden.
After much discussion and Shaw attorney David Downes invoking of the press privilege of source protecting, Judge Athey allowed discovery of any Shaw-Sayre communications, but not that of Shaw with a private citizen (Egger), a colleague at work (Bianchini) or the commonwealth’s attorney (Madden).
Private citizen Mark Egger, here pointing to a blow up of a check written to private investigator Ken Pullen by the EDA, or was it Jennifer McDonald? Either way, they both employed him to replace FRPD in investigating the EDA office break in.
“Communications with the plaintiff are one thing … but where you cross the Rubicon is requesting communications with other parties. I understand your point that she may have been an accessory but her communications in her professional capacity” with third parties were off limits, Athey told Berlik in prefacing his decision in apparent agreement with Downes that media has a professional right to keep some source communications private in the conduct of their profession.
As for the apparent conspiracy alluded to in the note containing Sayre’s phone number, as well as that of former Town Manager Michael Graham and the names “Tom”, “Norma Jean”, “Matt” and “the Examiner”, Berlik admitted some question exists when he told the court, “Whether it is authentic or not remains to be seen.”
What Berlik did not admit was his client’s connection to any such questions.
In fact, in prefacing his dismissal of the misdemeanor filing a false police report charge against McDonald on October 31, 2018, Judge W. Dale Houff commented, “There is something horribly wrong about the note.”
Following his Discovery Motions decision Athey questioned attorneys on the trial date for the Sayre-McDonald defamation case scheduled in General District Court downstairs. Told August and that both sides have indicated an appeal of the verdict is likely, Athey set a hearing date for the McDonald defamation case on the Motions Date of September 18, at 9 a.m. The judge indicated the likelihood of setting a trial date on the McDonald lawsuit then and observed the two cases could potentially be joined at that point.
The NOTE
The alleged conspirators’ “note” with its names and numbers appearing to implicate “Tom”, “Norma Jean”, “Matt”, Graham’s 202 phone number, and even “the Examiner” is likely to play a big role in both trials.
The note and vandalism it is allegedly tied to, among other incidents of trespass and vandalism at McDonald’s home and the EDA office complex came at a time Royal Examiner staff, then-Councilwoman Bébhinn Egger (Mark Egger’s daughter), and others eventually including Sayre and county board colleague Archie Fox were raising questions about the validity of multiple EDA projects being forwarded by McDonald as EDA executive director.
The FBI, along with VSP and perhaps the IRS, dropped by to say ‘hello’ at EDA offices on April 16, 2019.
Shaw, particularly, was deep into an investigation of large amounts of cash being used by McDonald in her personal real estate business transactions. Those real estate transactions, along with questioned EDA projects like ITFederal and Workforce Housing among others, lie at the heart of the EDA civil litigation now seeking recovery of $21.1 million in allegedly misrepresented, misdirected or embezzled assets.
Arrested by VSP on May 24, McDonald is now jailed without bond as a possible flight risk on four felony financial criminal charges, two of Fraud, Obtaining Money by False Pretenses in excess of $200; and two of Larceny-Embezzlement in excess of $200. Those appear related to the EDA civil suit “Afton Inn Embezzlements” allegations of falsifying work invoices to pay off credit card debts. The evidence on those charges appear fairly cut-and-dried evidentiary-wise compared to some other allegations in the EDA litigation.
The Special Grand Jury
However, as the civil defamation motions were being argued Wednesday on the second floor of the Warren County Courthouse, the Special Grand Jury convened to investigate potential criminality tied to the EDA civil litigation was meeting for what appears to be the first of several days of witness testimony this week.
Speaking of social media, the rumor of additional indictments being imminent have been floating on social media for weeks since those initial four indictments were handed down on May 24. One large question connected to any next round of sealed grand jury indictments is whether they will simply pile more on to McDonald’s legal plate, or add additional defendants into the mix.
Not directly related to the above question but more on the familiar faces sightings ledger, one encountered on the second floor of the Warren County Courthouse after the adjournment of the defamation hearing belonged to former County and EDA Attorney Blair Mitchell. Mitchell, who retired in April 2017, told media present he had testified for about an hour before the special grand jury but declined to elaborate on the nature of the questions he was asked.
But noting his retirement date and corresponding EDA business of the previous years, we can probably make an educated guess at some of those questions relating to Mitchell and McDonald’s interactions on projects cited in the Cherry Bekaert accounting investigation of EDA finances over the past decade. High on that list may well be Leach Run Parkway Easements, myriad other real estate transactions, not to mention the advent of the ITFederal and Workforce Housing Projects – (Come on, TELL US, Uncle Blair!!!)
Things seemed so much smoother – well mostly – then as Jennifer McDonald illustrates, circa 2013, with a playful pose with, from left, then Town Manager Steve Burke, Town Attorney Doug Napier and then County-EDA Attorney Blair Mitchell.
Crime/Court
Federal Prosecutors Office Issues Release on McDonald Sentencing
Below is a Press Release issued by the Western District of Virginia Prosecutor’s Office on May 29, the day of Jennifer McDonald’s sentencing in the Harrisonburg federal courthouse. It offers the prosecution’s perspective on the nature of the former Front Royal-Warren County Economic Development Authority Executive Director’s crimes centered on the unauthorized misdirection for personal use of EDA cash assets and acknowledges federal and state authorities work on the case.
Testimony at trial put that total misdirected to her personal use at between $5 million and $6.5 million. Here it is cited at $5.2 million, not coincidently the amount the prosecution asked for at Wednesday’s sentencing hearing and received from the court to be forfeited by McDonald as part of her sentencing. It was explained that “forfeiture” amount was separate from any restitution or court costs that might also be ordered by the court.
As readers will recall the total amount believed misdirected to fraudulent uses in the circa 2014-2018 EDA “financial scandal” was estimated at about $26 million. On paper in civil suits and out-of-court settlements the EDA has recovered around $20 million, tempered by an estimated $8 million in legal fees. However, most of the larger civil case jury verdicts of liability totaling around $20 million are being appealed by defendants (see the Royal Examiner “EDA in Focus” news category for details on those cases). To resolve pending civil liability claims against her, McDonald gave up an estimated $9 million in real estate held by one of her real estate LLC’s to the EDA.
Here is the Office of the Federal Prosecutor’s statement in its entirety:
Jennifer McDonald Used EDA Funds As Her ‘Personal Piggy Bank’
HARRISONBURG, Va. – The former executive director of the Economic Development Authority of Front Royal and Warren County (EDA), who was convicted in November of last year of stealing more than $5 million dollars in authority funds, was sentenced today to 14 years in federal prison.
Jennifer Rae McDonald, 45, of Front Royal, Virginia, was convicted following a 9-week jury trial in November 2023 of seven counts of wire fraud, six counts of bank fraud, sixteen counts of money laundering, and one count of aggravated identity theft.
The Western District of Va. Federal Courthouse in Harrisonburg where Jennifer McDonald was tried last year and sentenced this week. Below, McDonald on the job at EDA Board meeting with then-Chairman Patty Wines to her left. After her death, Wines became a key figure in McDonald’s defense narrative that there was a secret $6.5 million EDA payoff to her approved by Wines for not filing a sexual assault complaint against then high-ranking male County staff.
Jennifer McDonald, right, and then FR-WC EDA Board Chair Patty Wines on the job during earlier days.
“For more than four years, Jennifer McDonald used EDA funds as her personal piggy bank, diverting public funds to purchase real estate and to pay her personal expenses” United States Attorney Christopher R. Kavanaugh said today. “Today’s sentence reflects how serious this office takes fraud and the misuse of public funds. I am thankful to the FBI and the Virginia State Police for the tireless work they did to untangle the web of lies spun by this defendant.”
“The FBI is committed to investigating elected officials who abuse their positions for personal gain,” Special Agent in Charge Stanley Meador of the FBI’s Richmond Division said today. “I am proud of the work our team and partners did to uncover Ms. McDonald’s complex fraud scheme and to bring her to justice.”
The FBI and VSP on the scene at EDA headquarters on April 16, 2019, about four months after McDonald’s Dec. 20th resignation by email under increased scrutiny by her board. McDonald’s office and work computer were searched for evidence as a potential crime scene.
According to court documents and evidence presented at trial, McDonald was the Executive Director of the EDA, a public entity designed to attract and support businesses in Warren County and the Town of Front Royal. The EDA was overseen by a Board of Directors and supported by an administrative assistant, but at the center of the EDA was McDonald.
Beginning in 2014, McDonald began stealing money from the EDA and, for more than four years, McDonald used the bank accounts and credit facilities of the EDA to divert public funds to purchase real estate and to pay for her personal expenses. She falsified documents in order to mislead the EDA’s Board of Directors, external auditors, and Warren County and Front Royal government officials so she could continue her scheme.
When confronted by law enforcement and others, McDonald drafted fake loan documents, encouraged others to lie before a grand jury and fabricated an outrageous story, alleging the fraud was part of a “secret settlement” and invented more fake documents to cover-up her fraud.
In the end, McDonald pilfered the EDA’s bank accounts and is responsible for $5,201,329 in losses.
At trial, evidence was presented that at least $2.4 million of the money McDonald stole was used to fund her gambling – including net losses of more than $750,000.
In January 2018 McDonald posed in her office with what she told this reporter were winning receipts totaling about $1.8 million from playing the slot machines at Hollywood Casino at the Charles Town racetrack through the previous three years. Evidence at trial indicated her luck was going the other way, in part explaining her decision to misdirect EDA assets to her personal use, including high-dollar real estate transactions that were beginning to draw attention.
The Federal Bureau of Investigation and Virginia State Police investigated the case.
Assistant U.S. Attorneys Sean Welsh and Rachel Swartz and Trial Attorney Andrea Broach are prosecuting the case for the United States. Updated May 29, 2024
Crime/Court
McDonald Sentenced to 14 Years in EDA ‘Financial Scandal’ Case, Will Remain Free Till Told to Report to Prison Board ‘Not Before’ June 24
After hearing slightly over two hours of prosecution and defense arguments in support of their conflicting sentencing recommendations – 22 years by the prosecution, 6 years by the defense – Western District of Virginia federal Judge Elizabeth K. Dillon went down the middle, sentencing former Front Royal-Warren County Economic Development Authority Executive Director Jennifer McDonald to 14 years in prison for her role in the circa-2014 to 2018 EDA “financial scandal”. However, following a defense request that McDonald be allowed not to report to prison prior to June 18, and a request by lead prosecutor Sean Welsh that the court be reasonable in not extending imposition of the defendant’s imprisonment for too long a period, Judge Dillon granted the request that McDonald remain free on her existing bond conditions and self-report to prison authorities “not earlier than June 24th”. It was not clear whether a recent unanticipated hospital visit by McDonald this past weekend impacted that request. It was also confirmed by attorneys post hearing recess that per federal guidelines defendants are generally required to serve 85% of non-mandatory sentences, though how that standard is applied can vary from facility to facility. If our calculation is correct, full implementation could cut 2.1 years off the 47-year-old McDonald’s 14-year sentence.
An estimated $26 million was moved to unapproved or believed falsely presented uses during McDonald’s leadership of the Town-County EDA. Trial testimony indicated that as much as $6.5 million of that went directly to McDonald’s personal use. On November 1, 2023 a federal court jury of six men and six women found McDonald guilty on all 34 criminal counts she was charged with, including bank fraud (10 counts), wire fraud (7 counts), money laundering (16), and aggravated identity theft (1 count). Judge Dillon later overturned four of those convictions citing inadequate evidence by statute.
Jennifer McDonald has about a month before she must again dress in incarceration garb. Below is the Harrisonburg federal courthouse where she was sentenced to 14 years on Wednesday, May 29. Royal Examiner File Photos
The first phase of what was initially said to be a three-part sentencing hearing was held on April 9, with part 2 initially forecast to be held within a week, leading to a sentencing date then being set after the court had time to review submitted arguments. But with a month-and-a-half delay to Phase 2, it appeared the court had sufficient time to review applicable case law in anticipation of those Phase 2 arguments leading to her sentencing decision coming at the conclusion of those Wednesday, May 29th arguments.
As previously reported, after inheriting the case from two state prosecutors offices, Warren County (recusal due to staff work familiarity with some defendants) and Rockingham County (complexity, time involvement), on August 25, 2021, a 10th Western District of Virginia Federal Grand Jury handed down 34 federal criminal indictments against McDonald on the charges cited above. McDonald was initially arrested and charged criminally at the state level in mid-2019.
Also during Wednesday’s hearing, McDonald was hit with a series of financial penalties. Those included $5.2 million ($5,201,329 to be precise) forfeiture of assets which the prosecution sought, what appeared to be $3,000 in court costs, as well as a “Restitution” amount cited at $2.7 million.
While a statement of financial impacts on the EDA was cited as submitted, and quite an amount of time was spent on arguments about the financial and governmental impacts of McDonald’s crimes related to the illicit movement of EDA assets, only one person rose to the court’s call for impact statements from “victims” of her crimes. That person, perhaps ironically, was ITFederal principal Truc “Curt” Tran. Tran and his company have been cited as the largest single beneficiary of illicitly moved “financial scandal” EDA assets at $12 million alleged to have been moved to it under “false pretenses” for re-development of 30 acres of the former Avtex property. Those false pretenses appeared to be publicized access to about $40 million in federal government contracts, evidence later indicated Tran’s company only had a right to bid on, and none of which was apparently won. Readers may recall one of this reporter’s first stories at the newly formed Royal Examiner in mid-2016 was that the 30-acre parcel publicly discussed for purchase by ITFederal at $2.1 million, was gifted to Tran and his company for one dollar behind closed meeting doors. It might also be recalled that former U.S. Sixth District of Virginia Congressman Bob Goodlatte championed Tran and ITFederal as outstanding economic development partners for this community.
“Jennifer, Jennifer, Jennifer, what have you done,” Tran began from the courtroom podium, looking directly at McDonald to his left at the defense table with her federal court-appointed attorneys Andrea Harris and Abigail Thibeault. One of McDonald’s convictions was of “Aggravated Identity Theft” for allegedly using Tran’s name as an interested party in one of the later-discovered-to-be fraudulent real estate transactions. Tran did cite that transaction of the time – “I still don’t know where the Buck Mountain property is,” he told the court, pointedly looking at McDonald.
However, twice Judge Dillon had to caution Tran to return to impacts of that real estate transaction in which his name was used without his knowledge when he appeared to pivot to blame McDonald for his lost government contracts to enable the Avtex site development. After the second caution, Tran ended his impact statement. Tran was found liable for over $12 million to the EDA in one civil liability case heard in Warren County Circuit Court. His finding of liability is on appeal, along with several other high-dollar EDA civil case defendants.
Crime/Court
POLICE: 7 Day FRPD Arrest Report 5-13-2024
Front Royal Police Department arrest report for the past 7 days:
Crime/Court
Chicago Man Arrested After High-Speed Pursuit on I-81 in Virginia, Charged with Assault and DUI
A Chicago man is in custody after fleeing from law enforcement on Saturday (May 4). Marco A. Cruz-Monroy, 27, faces multiple charges in Frederick County, including assault on a law enforcement officer and driving under the influence of drugs (DUI/DUID).
Around 9:45 a.m., motorists on I-81 reported a Dodge pickup driving recklessly, with objects being tossed from the vehicle. Virginia State Police located the truck near the 304-mile marker and attempted to stop it for reckless driving. Despite initially slowing and moving to the shoulder, the truck sped off, prompting a pursuit.
During the chase, the Dodge intentionally rammed a trooper’s vehicle, forcing it off the road. The pursuit continued to the Exit 315 ramp, where Cruz-Monroy’s truck struck a civilian vehicle, causing both vehicles to crash. Cruz-Monroy then barricaded himself in his truck, refusing to comply with commands before eventually surrendering.
While being evaluated by EMS, Cruz-Monroy became combative and bit a trooper, who suffered minor injuries and was treated at Winchester Medical Center. Cruz-Monroy is now in custody at Northwest Adult Detention Center, held without bond, with additional charges pending.
No civilians were injured during the chase or the crash.
Crime/Court
McDonald Criminal Convictions Sentencing Hearing, Part 2, Set for Late May
In the wake of the April 9, Part One Sentencing Hearing of former Front Royal-Warren County Economic Development Authority Executive Director Jennifer McDonald, the website court calendar of the 10th Western District of Virginia has finally posted a date for Part Two of that hearing. That date is Wednesday, May 29, 2024, on the 10 a.m. docket in the Harrisonburg federal courthouse where McDonald was convicted of 30 criminal counts related to the FR-WC EDA “financial scandal” circa 2014 to 2018. Those who have followed that story since it began unraveling, including on these pages from the fall of 2016 to late 2018, will recall an estimated $26-million in EDA assets was moved to unauthorized or what is now believed to be fraudulently presented uses. Trial testimony indicated McDonald moving about $6.5 million to her personal use unauthorized by the then EDA Board of Directors.
As reported in our coverage of that April 9 hearing, Part Two will hear Judge Elizabeth K. Dillon’s rulings on a number of objections filed by both the prosecution and defense counsels to the precedence of evidence submitted by the other side in written summaries to the court leading up to the April 9th start of McDonald’s sentencing hearing. Also argued on April 9 were “Forfeiture” of defendant McDonald assets, “Restitution”, and “Special Conditions” being sought at sentencing from both the prosecution and defense. While Judge Dillon ruled on a number of these objections on April 9, she took some under advisement, seeking written support from both sides to their motions arguments.
The federal courthouse in Harrisonburg, where final pre-sentencing arguments will be heard on May 29. At that Part 2 hearing, a date will be set by Judge Dillon for Part 3, when Jennifer McDonald is expected to be sentenced from 6 to 22 years in prison on her jury convictions on 30 criminal counts related to the estimated $26-million EDA ‘financial scandal’ during her executive director leadership. Royal Examiner File Photos Roger Bianchini
In addition to those rulings, prosecution and defense counsel are expected to make final arguments in support of their sentencing proposals, and Judge Dillon will set a date for Part Three of the Sentencing Hearing. Part Three is when the 47-year-old McDonald is anticipated to find out the court’s ruling on arguments for relative leniency to prison sentencing guidelines, six years, by her legal team versus the prosecution’s high-end request. The prosecution is seeking a 22-year sentence with 24 months sought for an Aggravated Identity Theft conviction of McDonald regarding the use of Truc “Curt” Tran’s name in one involved “financial scandal” real estate transaction, tacked on to a total of 240 months (20 years) being sought on McDonald’s other 29 convictions on fraud and money laundering counts.
Crime/Court
Major Online Child Protection Operation Nets Arrest in Warren County
In a crackdown on internet crimes against children, the Warren County Sheriff’s Office, in collaboration with the Northern Virginia/DC Metro Internet Crimes Against Children (ICAC) Task Force, has announced the arrest of Steven C. Sherman, a 57-year-old man from Inwood, WV. This arrest is part of a broader effort to combat the online solicitation of minors in the region.
Name: Steven C. Sherman – Description: 6’06” white male, blue eyes, and red hair – Address: Inwood, WV – Felony Offenses:
§18.2-374.3. Use of communications systems to facilitate certain offenses involving children. (x3 counts) Photo Courtesy of Eastern Regional Jail
The operation, which began covertly on February 28, 2024, involved undercover officers posing as minors online to identify and apprehend individuals attempting to exploit children. Mr. Sherman reportedly initiated unsolicited contact with an investigator who was posing as a juvenile under the age of 15. Over the course of their communications, he allegedly requested lewd photos and engaged in the transmission of obscene materials, believing he was interacting with a young girl.
On April 16, 2024, following a detailed investigation and with the assistance of the Berkeley County Sheriff’s Office, Mr. Sherman was arrested without incident and is currently held at the Eastern Regional Jail. Facing serious charges for his actions, he appeared before a magistrate and was ordered to be held without bond, pending extradition to Virginia. His court date is May 9, 2024, at the Warren County Juvenile and Domestic Relations Court.
The Warren County Sheriff’s Office has expressed gratitude towards the Berkeley County Sheriff’s Office for their support in the operation and emphasized the importance of inter-agency cooperation in tackling such critical issues. The community is also encouraged to come forward with any information related to soliciting or exploiting minors by contacting Criminal Investigations Sergeant M.R. Ramey at (540) 635-7100 or via email at mramey@warrencountysheriff.org.
This case highlights the ongoing risks and challenges posed by online interactions and the importance of vigilance in protecting vulnerable populations, especially children, from exploitation. The Warren County Sheriff’s Office remains committed to fighting against internet crimes targeting children and urges the public to report any suspicious activities.
As this case progresses, the community hopes for a resolution that reinforces the safety and security of its children and serves as a deterrent to others who might exploit the internet’s anonymity for harmful purposes.
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