The level of authority given former Front Royal-Warren County Economic Development Authority Executive Director Jennifer McDonald to pursue client contact leads and a consequent lack of oversight from her board of directors was a primary issue in testimony and closing arguments on Friday, May 31.
In fact, some professional tension was palpable between McDonald defense counsel Jay McDannell and lead EDA attorney Cullen Seltzer as they summarized the cases they had presented over 2-1/2 days leading to closing arguments beginning at 12:45 p.m., Friday afternoon. The result of that third and final day of the EDA civil suit motions hearing was previously reported in Royal Examiner, below:
In beginning his rebuttal to the plaintiff attorney’s closing statement McDannell referenced what he termed “vitriolic attacks on my client”. They were attacks he said he had tried not to respond in kind to – “That ends today” he told the court.
And he wasn’t kidding – McDonald’s attorney called the plaintiff case “craven and stupid” adding, “They put the cart before the horse” in an attempt to cover what he called “a failed filing” of the EDA $17.6 million civil action against nine defendants alleged to have engaged with McDonald in a wide, if compartmentalized conspiracy to embezzle or misdirect millions of dollars in EDA assets.
“The largest claim is a breach of contract claim for a contract that has never been breached – and it is against someone else,” McDannell noted of the $10 million loan the EDA secured from United Bank for ITFederal LLC and its CEO Truc “Curt” Tran.
In fact, a significant portion of former EDA board member Ron Llewellyn’s testimony, which was by far the lengthiest of four current or former board members called to testify Friday, addressed the process and rationale in acquiring that loan.
A nine-year board member prior to his resignation effective March 23, Llewellyn told the court that the ITFederal project “was considerably different than any other project we ever worked on … We were all excited about the first Brownfield site project,” Llewellyn noted of the first commercial client drawn to a planned 147-acre business park on the former 467-acre Avtex federal Superfund site in the Town of Front Royal.
Llewellyn testified he had concerns about the project early on due to an inability to find any substantive information about the company and its alleged $140-million or so in annual federal government contracts online. However, he noted that the EDA’s executive director always assured him she had verified the validity of the information about ITFederal and its government contracts.
“Did you ask how she verified it?” McDannell pressed Llewellyn on cross examination.
“No, not precisely,” Llewellyn admitted.
“Maybe because it was brought to us by the congressman due diligence wasn’t done. I couldn’t find anything online but Jennifer always had an explanation, I thought was through the congressman,” Llewellyn said.
“So it got credibility from Congressman Goodlatte – what would you say the impact of that was?” McDonald’s attorney asked.
“More than it should have,” Llewellyn testified about three-and-a-half to four years down the road from then U.S. Congressman Robert Goodlatte’s championing of ITFederal in 2014-2015 as a $40-million investor who would bring 600-plus high-paying tech jobs to this community.
In fact, Llewellyn recalled a conversation with Goodlatte at the October 2015 ITFederal ribbon-cutting here launching the idea of a $10 million loan to Tran’s company. Llewellyn said he, McDonald, then-EDA Board members Patty Wines, who was board chair, and Jim Eastham who was in banking professionally, were in the group with whom Goodlatte first broached the ITFederal loan idea.
Llewellyn testified that McDonald reported back that when first offered the loan, Tran had balked. However, the EDA decided to continue pursuing the loan after Goodlatte explained he wanted to be able to promote the Avtex Brownfield site “to other prospects by saying, ‘We not only got you this nice piece of land but financing for your project too’.
“So Jennifer went back to Tran and explained that Goodlatte said it needed to be done anyway (whether he needed it or not), and he says, ‘Okay’,” Llewellyn said of the process he recalled achieving the ITFederal bank loan.
What Llewellyn didn’t explain, and wasn’t really asked to at this hearing level, was why the EDA board would agree to extend a 30-year payback on a $10-million loan to Tran that the EDA has a 7-year balloon payment due to First Bank & Trust of Abington on. For you non-bankers out there, on the surface, those conflicting schedules mean the EDA must pay the loan back to the bank in full after seven years, while Tran has another 23 years to pay the balance on the $10 million back to the EDA. Talk about economic development working for YOU!
However, EDA Attorney Dan Whitten explained to Royal Examiner that the EDA has the option of renegotiating the monthly amount of Tran’s payback; and will likely attempt to refinance its loan payment to First Bank & Trust after those seven years. So if things go well the EDA may be able to continue to have Tran’s payments cover the cost of a refinanced bank loan. Whitten said the discrepancy likely occurred because the EDA-Tran terms were signed in September 2015 when the Town bridge loan was made to the EDA, and the EDA-First Bank & Trust terms were signed three months later when the bank loan was realized in December 2015.
And on the bright side, as Town Councilman Eugene Tewalt likes local media to stress, the Town of Front Royal DID get its twice-extended to three-months $10-million “bridge loan” to the EDA and Tran back in full when the loan through First Bank & Trust of Abingdon was accomplished. However as we also recall, the Town did lose out on two months of interest totaling around $8,000 because the term of the “bridge loan” was supposed to be a month and the bridge loan arrangement only included one month’s payment equal to what the Town had been collecting in monthly interest on those $10-million dollars in an investment account.
But back to the civil litigation hearing’s closing arguments of May 31, 2019: citing EDA “board failings of oversight” McDannell told the court of his clients’ culpability, “Her actions are attributable to them – not that she did everything right, but did she misunderstand the authority her board had given her?” McDannell asked rhetorically with a clear indication of his thoughts on an answer.
However in the plaintiff’s closing statement delivered first, Seltzer pointed to the testimony of the four former and current EDA board members heard that day. They were asked in to testify about Defense Exhibit 8 offered the previous day to illustrate board approval of a McDonald purchase of up to $2.5 million for potential use as an industrial cattle farm operation by a Tran company, Front Royal Farms LLC. Testimony indicated the planned Tran operation would produce beef to be sold in the Far East, particularly to Vietnam, Tran’s native country.
Former EDA Treasurer William Biggs, current Vice-Chairman Bruce Drummond, current Front Royal Vice-Mayor William Sealock, and Llewellyn all testified that they had not previously seen the Closed Session, Confidential Resolution authorizing McDonald to spend up to $2.5 million on a property for the cattle ranch land purchase on Trans’ behalf. That was the defense exhibit EDA Attorney Dan Whitten described during his Thursday testimony as a “fabricated document” produced by McDonald.
All four past and present EDA board members said Friday that while it appeared their signatures were on the document, they had not previously seen that particular resolution. They also verified Whitten’s testimony of the previous day that such a resolution would not be signed in closed session or likely be marked “Confidential” as it was.
The quartet of EDA board members also expressed varying degrees of knowledge or a lack thereof about EDA board discussion of Tran’s prospective Front Royal Farms operation. However, all agreed whatever discussion had occurred was far from the authorization of millions of EDA dollars to be committed to the purchase of land for such an endeavor.
Previous hearing testimony indicated that those parcels referred to as “the Buck Mountain properties” were sold back to the original owner William Vaught Jr. a month or so after purchased by McDonald real estate company DaBoyz LLC at a $600,000 loss.
“Even after she left (the EDA) she continued to conceal against those board members we heard from today. She betrayed that trust in the most pernicious ways,” Seltzer told the court in summarizing his case for attachment of $3.17 million of McDonald or her real estate companies’ assets.
Of Defense Exhibit 8, the EDA attorney called it “unbelievable, bare-faced contempt”, not only of her former board members but of the court in its attempt to render a judgment on the freezing or releasing of McDonald assets related to the civil litigation.
“She has attempted to deceive the court – I’ve never seen anything like that in a courtroom,” Seltzer said of the introduction of an apparently fraudulent document in support of a defense motion not to enjoin defendant assets.
The Sands-Anderson attorney made it clear he was not implicating his legal adversary in that deception – “He has been used by his client to perpetuate shocking deceit,” Seltzer told the court.
However, McDannell disputed that assessment, noting his client’s agreement to withdraw the document and her voluntary assertion that two properties under her control were being held in a “constructive trust” for the EDA.
He also pointed out to the court that his client had not tried to convert her real estate assets into cash and flee prior to facing the civil and criminal charges now hanging over her head, those latter charges leaving her incarcerated as a flight risk.
As reported in our above-linked initial story of the court ruling, Judge Athey took a middle ground in attaching some McDonald cash and real estate assets and not others, on the latter front leaving those co-owned with other family members alone, and on the former leaving her funds to pay for her defense against the felony criminal charges she faces.
See Related Story:
Suboxone manufacturer Indivior’s former chief executive officer sentenced to jail time in connection with drug safety claims
Shaun Thaxter, the former chief executive officer of Indivior PLC, was sentenced today in U.S. District Court in Abingdon to 6 months in federal prison. He was also ordered to pay a fine of $100,000 and forfeit $500,000. Thaxter pleaded guilty to a one-count misdemeanor information on June 30, 2020, for his role in causing the introduction into interstate commerce of misbranded shipments of the opioid drug Suboxone Film, a violation of the Federal Food, Drug, and Cosmetic Act. Acting United States Attorney Daniel P. Bubar announced the sentence today.
Thaxter served as Indivior’s top executive from 2009 until shortly before his guilty plea. This includes the time period prior to December 2014 when Indivior was known as Reckitt Benckiser Pharmaceuticals. When Indivior was known as Reckitt Benckiser Pharmaceuticals, it was a subsidiary of British conglomerate Reckitt Benckiser Group (RB Group). RB Group paid $1.4 billion in 2019 to resolve its liability to the United States related to the marketing of Suboxone. On July 24, 2020, an Indivior subsidiary called Indivior Solutions pleaded guilty to a one-count felony information for false statements related to health care matters, and together with Indivior, agreed to pay an additional $600 million to resolve liability to the United States related to the marketing of Suboxone. On August 26, 2020, Indivior’s former medical director, Timothy Baxter, pleaded guilty to a one-count misdemeanor information for a violation of the Federal Food, Drug, and Cosmetic Act related to the marketing of Suboxone. Indivior Solutions and Baxter have not yet been sentenced.
Suboxone Film is a drug product approved for use by recovering opioid addicts to avoid or reduce withdrawal symptoms while they undergo treatment. Suboxone’s active ingredient, buprenorphine, is a powerful and addictive opioid. Thaxter was charged in connection with Indivior’s misrepresentations regarding the safety of Suboxone Film.
“While Thaxter served for years as Indivior’s chief executive, he was in a position to ensure that doctors, patients, and insurers were dealt with honestly,” Acting United States Attorney Bubar said today. “Instead, Thaxter failed to prevent efforts to build profits through misleading safety claims, which led to millions of dollars in ill-gotten gains for Indivior. As the Court recognized today, this sentence should serve as a deterrence to other pharmaceutical executives. Today’s sentencing is also the product of years of work and could not have happened without the close federal and state law enforcement partnerships, for which we are grateful.”
“Families and communities across the Commonwealth continue to feel the devastating effects of the opioid epidemic,” said Virginia Attorney General Mark Herring. “Opioid manufacturers and their executive leadership must be held accountable for taking advantage of this country’s opioid crisis and putting profits over people. I want to thank my Medicaid Fraud Control Unit for their terrific work on this case as well as our local, state, and federal partners for their continued partnership on these cases.”
“Misrepresentations made about the drug, while Thaxter ran the company, misled MassHealth about the potential risk of accidental opioid exposure. It is inexcusable to willfully disregard requirements that treatment medications be prescribed carefully in order to protect patient health and safety,” said Elton Malone, Assistant Inspector General for Investigations with the Office of Inspector General of the U.S. Department of Health and Human Services. “With our law enforcement partners, we will continue investigating and bringing to justice those placing profits over patients in government healthcare programs.”
“Opioid addiction is a significant public health crisis and addressing opioid abuse continues to be one of FDA’s top priorities. Misleading information about relative product benefits undermines efforts to provide affordable treatment to those suffering from opioid addiction,” said Judy McMeekin, Pharm.D., Associate Commissioner for Regulatory Affairs, U.S. Food and Drug Administration. “We will continue to investigate and bring to justice those whose schemes jeopardize public health and put Americans at risk.”
“The U.S. Postal Service spends billions of dollars per year in workers compensation and health care-related costs, most of which are legitimate,” said Kenneth Cleevely, Special Agent in Charge of the Eastern Field Office for the U.S. Postal Service Office of Inspector General. “However, when medical providers or companies choose to flout the rules and profit illegally, special agents with the USPS OIG will work with our law enforcement partners to hold them responsible. To report fraud or other criminal activity involving the Postal Service, contact USPS OIG special agents at www.uspsoig.gov or 888-USPS-OIG.”’
According to court documents, Thaxter had authority over Indivior’s marketing and sales of Suboxone Film which, along with other Suboxone products, generated nearly all the company’s revenue. In 2012, Thaxter oversaw and encouraged Indivior’s efforts to secure formulary coverage for Suboxone Film from the Massachusetts Medicaid agency called MassHealth. Thaxter asked Indivior employees under his direction to devise a strategy to win preferred drug status for Suboxone Film and counteract a non-opioid competitor MassHealth was considering for opioid-addiction treatment. Certain Indivior employees subsequently shared false and misleading safety information with MassHealth officials about Suboxone Film’s risk of accidental pediatric exposure. Two months after receiving that false and misleading information, MassHealth announced it would provide access to Suboxone Film for Medicaid patients with children under the age of six.
The criminal cases against Thaxter, Indivior, and Baxter are being prosecuted by attorneys from the U.S. Attorney’s Office for the Western District of Virginia and the Department of Justice’s Civil Division, including Albert P. Mayer, Randy Ramseyer, Kristin L. Gray, Joseph S. Hall, Janine M. Myatt, Garth W. Huston, Carol Wallack, Charles J. Biro, and Matthew J. Lash. The criminal investigation of Thaxter was handled by the Virginia Medicaid Fraud Control Unit; FDA’s Office of Criminal Investigations; United States Postal Service – Office of Inspector General; and U.S. Department of Health and Human Services – Office of Inspector General.
Texas man sentenced on cyberstalking, making interstate threats
Editor’s note: this case relates to the spring of 2018 death of Apple Mountain 16-year-old Sarah Rose Genari, which was ruled a suicide. As previously reported, O’Dell had bragged online of being responsible for the girl’s death and then began threatening her family members under assumed social media aliases. Related Article
HARRISONBURG, VIRGINIA – Adrian Raul O’Dell, an Odessa, Texas man, who had an online relationship with a juvenile female in the Western District of Virginia and later cyberstalked and made online threats to the girl’s family following her suicide, was sentenced today to 41 months in federal prison. Acting United States Attorney Daniel P. Bubar and David W. Archey, Special Agent in Charge of the FBI’s Richmond Division made the announcement today.
O’Dell, 20, was charged in October of 2019 and arrested the following month at his home in Texas. He pleaded guilty earlier this year to two counts of cyberstalking and one count of making interstate threats.
“In today’s increasingly virtual world, where we live, work and learn online, this sentence demonstrates that if anyone uses these platforms to cyberstalk, harass and threaten others, we will hold them accountable,” Acting United States Attorney Bubar said today. “The FBI and Warren County Sheriff’s Office did an outstanding job in finding Mr. O’Dell and bringing him to justice in Virginia for his abhorrent actions. My office sends its deepest condolences to the family in this case, who lost a loved one, and hope they find some solace knowing justice was served.”
“The FBI is fully committed to investigating all forms of child exploitation, cyberstalking and online threats. We will pursue those responsible and bring them to justice,” said Special Agent in Charge David W. Archey. “Our hearts and thoughts are with the family through these difficult times.”
According to court documents, between September 2017 and around March 2018, O’Dell had an online relationship with a 16-year-old girl who lived in Linden, Virginia. In May 2018, following an investigation by the Warren County Sheriff’s Office, it was determined that the girl died by suicide in a wooded area near her home.
From June 2018 through June 2019, O’Dell, using a variety of false email and online personas, took credit for her suicide. The defendant then sent threatening and intimidating messages to her family members and friends that placed them in reasonable fear of death and serious bodily harm. In addition, these messages attempted to cause friends and family members substantial emotional distress. The defendant sent certain of these messages in violation of a protective order.
The investigation of the case was conducted by the Federal Bureau of Investigations and the Warren County Sherriff’s Office. Assistant United States Attorney Kate Rumsey is prosecuting the case for the United States.
Three local men and juvenile charged with abduction by force, simple assault or battery by mob
On Tuesday, October 13, 2020, the Front Royal Police Department arrested four individuals for their involvement in an October 5th incident. Trevor James Lee Sutphin, 19, Hugo Orlando Nunez II, 22, and Luis Henrique Jose, 22, of Front Royal were charged with § 18.2-47 Abduction by Force and § 18.2-42 Simple Assault or Battery by Mob. An identified juvenile suspect also faces the same charges.
The charges are a result of an investigation that began when a recorded video surfaced of a visibly shaken adult male victim. During the video recording, the victim was forced to apologize to several people. Upon further investigation, it was determined the male was lured to an apartment within the Town of Front Royal where he was allegedly threatened and assaulted. The video was shared repeatedly on Snapchat.
The three adult suspects were arrested without incident and transported to Rappahannock Shenandoah Warren (RSW) Regional Jail where they were held without bond. Their first court appearance was scheduled for October 20, 2020, at 10:00 am in Warren County General District Court. The juvenile suspect charges will be heard in the Warren County Juvenile Court.
This investigation is ongoing and anyone with further information is asked to contact the Front Royal Police Detective Sergeant J.M. Winner at (540) 636-2208 or by email at firstname.lastname@example.org.
Front Royal man charged for embezzlement and possession of a controlled substance
On October 9, 2020, Front Royal Police arrested Barrington Allen Moore, 31, of Front Royal, for felony embezzlement and felony possession of a controlled substance. The alleged embezzlement occurred at Kentucky Fried Chicken, located at 807 John Marshall Highway. An investigation determined that over $1,000 had been stolen from the business between August and September of 2020.
Upon his arrest, a search of Moore’s person was conducted, and detectives located two bags of white powder reported by Moore to be “Molly”, a scheduled 1 narcotic. Moore was transported to Rappahannock Shenandoah Warren (RSW) Regional Jail where he is currently held on a $1,500 bond. A court date for these offenses is set for November 10, 2020, at 10:00 AM, in Warren County General District Court.
This investigation is ongoing and anyone with further information is asked to contact Front Royal Police Detective L.J. Waller at (540) 636-2208 or by email at email@example.com.
Shooting on Jackson Street
On Wednesday, October 14, 2020, at approximately 8:40 pm, the Front Royal Police Department responded to a report of a shooting in the 100 block of W. Jackson Street. When officers arrived at the scene, they encountered a male, identified as Clarence Sheppard, 40, of Front Royal, with gunshot wounds to both legs. Sheppard disclosed that he was shot upon exiting his vehicle. The victim was transported to Warren Memorial Hospital and then transferred to Winchester Medical Center, where he received treatment for serious but non-life-threatening injuries. He has since been released from the hospital.
Witnesses stated there were possibly three male suspects all wearing hoodies to conceal their identity. Two of the suspects wore black hoodies and the third suspect wore a white hoodie with striped pants and white shoes. Officers searched the area and a subject was briefly detained in the 500 block of Virginia Avenue whose clothing matched the description given by witnesses.
This investigation is ongoing and anyone with any further information is asked to contact Front Royal Police Detective D.L. Fogle at (540) 636-2208 or by email at firstname.lastname@example.org.
Two sentenced for roles in Maryland-to-Virginia heroin pipeline that resulted in fatal overdose
Two individuals connected with a heroin trafficking conspiracy that brought heroin from Maryland into Shenandoah County, Virginia, and caused one fatal and one non-fatal overdose were sentenced last week in U.S. District Court in Harrisonburg. Acting United States Attorney Daniel P. Bubar and Jesse Fong, Special Agent in Charge of the Drug Enforcement Administration’s Washington Field Office made the announcement today.
James Harold Lichliter, 52, of Mauretown, Va., was sentenced to 144 months in federal prison. In a separate hearing, Jonathan Dale Neice, 42, of Woodstock, Va., was sentenced to 132 months incarceration.
Both Lichliter and Neice previously pleaded guilty to one count of distribution and possession with the intent to distribute resulting in the death of J.H. and the serious bodily injury of J.W. Co-defendants Craig Kidwell, Norma Kidwell, and Stacy Allen Marston are awaiting sentencing.
“The scourge of heroin is a deadly killer that does not discriminate. This office will do all it can to stem the tide and prosecute anyone who participates in its distribution in our communities,” Acting United States Attorney Bubar said today. “We will use all available resources and continue to closely partner with federal, state and local law enforcement to hold drug dealers like Lichliter and Neice, who seek to profit from this treacherous epidemic, responsible for their actions.”
According to court documents, beginning around June 2017 a Maryland-based drug-trafficking network began selling controlled substances to Virginia-based drug traffickers, who, in turn, transported those drugs to Shenandoah County for redistribution.
Defendants Craig Kidwell and his wife Norma Kidwell repeatedly traveled from their home in Shenandoah County to Maryland to obtain heroin from the Maryland-based drug-trafficking organization. At times, the heroin Craig Kidwell and Norma Kidwell obtained from their Maryland-based source was mixed with other drugs, such as fentanyl and acetyl fentanyl.
After obtaining heroin, Craig Kidwell and Norma Kidwell transported the drugs back to Shenandoah County where the drugs were redistributed to others, including, but not limited to, co-defendants Lichliter, Marston, and Neice, who redistributed the drugs to others around Shenandoah County.
As a direct result of the defendants’ drug distribution activities, two overdoses occurred, one of which resulted in the death of victim J.H.
The investigation of the case was conducted by the Drug Enforcement Administration, Virginia State Police, Shenandoah County Sheriff’s Office, and Woodstock Police Department with the assistance of the Shenandoah County Commonwealth’s Attorney’s Office and the United States Attorney’s Office for the District of Maryland. Assistant United States Attorney Jeb Terrien is prosecuting the case for the United States.