Out of 2nd Special Meeting Closed Session of the Week the EDA Authorizes Legal Action on Seizure of McDonald/North Properties

The Front Royal-Warren County Economic Development Authority Board of Directors convened a Special Meeting at 5 p.m. Friday afternoon, February 9. By 5:02 p.m., the board had entered the first order of business, a Closed/Executive Session. At 5:13 p.m., the EDA exited the closed session and reconvened to open session. At that point, under “New Business,” the four members present, Chairman Scott Jenkins, Jorie Martin, Jim Wolfe, and Rob McDougall, unanimously approved a motion related to the Special Meeting action earlier in the week regarding gaining possession of the Faith Way home property and three vehicles of former EDA Executive Director Jennifer McDonald and her husband, Samuel North.

The February 9th motion authorizes that: “The FR-WC EDA coordinate with Warren County to engage local attorney, Nate Adams, to represent the EDA in matters related to enforcement of EDA’s rights regarding property deeded or otherwise conveyed to the EDA by Jennifer McDonald and Samuel North, and matters related thereto. The EDA further authorizes Warren County to pay the legal expenses and costs related to this representation subject to the condition that the EDA is expected to reimburse Warren County when it is able to do so. The EDA Board Chair (Scott Jenkins) and Secretary (Hayden Ashworth) are authorized to sign documents related to this matter.”

The meeting then adjourned at 5:17 p.m.

File photo of the now County-overseen FR-WC EDA Board of Directors meeting with County Director of Economic Development Joe Petty, closest back to the camera, as now County Board of Supervisors Chair Cheryl Cullers, seated above, away from the meeting table, observes.

This action comes on the heels of the earlier EDA Special Meeting and closed session of Tuesday, February 6, after which the move on the court order granting the McDonald-North home property and vehicles to the EDA was announced. The retaining of legal counsel on this specific matter appears to be necessary because, according to EDA officials, the couple is still in the house and has not yet agreed to vacate the property. This is occurring despite the fact that court records indicate the deed to the property and vehicle titles were turned over to the EDA by McDonald and North in a notarized document appearing to be signed by both dated Monday, February 5, a deadline imposed by the court.

However, according to a motion filing on behalf of McDonald and North also made on February 5, they appealed the court’s initial January 17 awarding of the properties to the EDA effective February 5. Counsel for the couple wrote that two of the three involved vehicles were used by McDonald and North for their work, which enabled them to make payments on their debts to the EDA. The third vehicle was said to be in disrepair and virtually worthless.

“The amount owed to the Creditor by each debtor far exceeds what could be obtained from a sale of the properties set out in the order of January 17, 2024. The wisest course of action by the Creditor would be to allow the debtors to retain the properties and to set up a plan for payments on the debts,” the motion signed by McDonald and attorney Frank Reynolds for Samuel North asserted.

But both motions were rejected by the court in a written response of February 5, without the requirement of a hearing, Judge Funk noted.

There may be a lull in trials locally related to the EDA ‘financial scandal’ recently; however, Court Orders coming from the Warren County Courthouse in the new year are impacting the lives of involved people, most pointedly Jennifer McDonald and her husband, Samuel North.

That January 17 court order on transfer of the properties lists the EDA as “Judgement Creditor” and McDonald and North as “Judgement Debtors”. Condition 4 of the court order instructs the Debtors to “… deliver all other documents, and take all other actions, necessary to immediately effectuate the transfer of the Property to the Creditor as the Creditor deems necessary …” as noted above, effective February 5.

That instruction is followed by Condition 5, which adds that: “Failure to do so may result in Jennifer McDonald and Samuel North being found in contempt of court and being fined, imprisoned, or both.” I guess when it rains, it pours when you’re still the primary figure, or her husband, in legal actions surrounding what has now been ruled in multiple court cases as an unauthorized transfer of an estimated $26 million of EDA assets to the personal benefit of yourself or others.

Final condition 6 above the signatures of Judge Funk, Richmond-based EDA legal counsel Cullen Seltzer, Court Clerk Haley Phipps, McDonald, and attorney Frank Reynolds for his client Samuel North, adds: “The Court shall retain exclusive jurisdiction with respect to any matters, claims, rights or disputes arising from, based upon or related to this Order and the implementation and effectiveness of the transfer of the Property.”

The WC EDA is moving legally to gain possession of and sell the home of Jennifer McDonald and her husband, Samuel North, along with several vehicles, as part of civil recovery efforts on losses incurred during McDonald’s tenure as EDA Executive Director. An attorney for the couple has reasoned that such a seizure minimizes both McDonald, while she is still free, and her husband’s ongoing ability to work and make payments on their liability judgements in the EDA ‘financial scandal’. However, the court denied the motion to overturn its Jan. 17 order, effective Feb. 5, to transfer the property’s ownership to the EDA.

This evolving legal dispute over the local court-ordered transfer of assets from primary EDA “financial scandal” principal McDonald and her husband is emerging as McDonald awaits a new sentencing date on her convictions on 30 criminal counts related to the EDA “financial scandal” in the 10th Western District of Virginia federal court last November 1. As previously reported, her original sentencing date of February 12 was delayed on a defense motion noting missed court Pre-Sentencing Report filing deadlines and ongoing medical examinations McDonald is having that could impact sentencing parameters and incarceration locations due to the result of those medical tests.

North has had his own civil court issues and jury findings of financial liability, as we understand, still on appeal, related to his wife’s alleged, and now convicted on, actions related to the unauthorized movement of EDA assets between 2014 and 2018.