In addressing the Town of Front Royal’s amendment to its lawsuit upping its estimate of lost assets due to financial fraud in the workings of the local Economic Development Authority from $3 million to $15 million, Town Attorney Doug Napier commented on what he perceived as a somewhat surprising degree of sophistication in how alleged embezzlement and misdirection of EDA, and consequently Town, assets was accomplished.
In its July 12 filing to amend the amount being sought for recovery from the EDA, the Town legal department notes that the “Financial Study” it had unsuccessfully been seeking a copy of from Warren County and the EDA over several months of FOIA requests had been “voluntarily” sent to it by County-contracted investigative accounting firm Cherry Bekaert. Information from that 2900-page report on signs of fraud within the EDA in hand, Town staff amended its original complaint upward by $12 million.
Asked about the additional loss estimate Napier told Royal Examiner, “During our review of the Cherry Bekaert financial study of the EDA, including the interviews of the EDA Board of Director and staff members some new facts and circumstances were brought to light which caused me to think that the Town’s consequential damages in particular, and even direct damages, might be larger than the Town had originally thought. So I thought the Town would be well served by getting out in front of this.”
Asked to elaborate, Napier added, “There are some indirect losses – we can’t blame it all, or say she took it all herself. But there are consequential damages or peripheral losses, a sort of ripple effect. And we wanted to be careful and aim higher, rather than lower in estimating our total losses.”
“She” is former EDA Executive Director Jennifer McDonald, jailed since May 24 on financial fraud charges. Related to some of the Cherry Bekaert information Napier observed, “In ways it is really complicated – her ability to figure out how to alter the books, forge documents – if what is in the report is what happened, if the (EDA) board is telling the truth about not signing those documents, it is really sophisticated. It makes you wonder if she had an advisor or she’s just really smart, or both. I really don’t know – but it took somebody who really knew what they were doing, to pull off.”
In the Town’s initial June 21st filing of a nine-page civil action against the EDA there was scathing criticism of a lack of oversight of McDonald through 2018, even after the May 2018 Town staff discovery of years of debt service overpayments to the EDA totaling over $291,000; and an apparently volatile August 23 confrontation between town officials and auditors with McDonald in the presence of then-EDA Board Chairman Greg Drescher and EDA Attorney Dan Whitten.
“It was Town employees and agents who, on August 23, 2018, caused McDonald to admit, in person and while in the presence of the EDA/County Attorney and in the presence of the Chairman of the Board of Directors of the EDA, that McDonald had personally submitted false, and thereby knowingly and fraudulently, billing invoices to the Town for payment … Notwithstanding the events of August 23, 2018, the EDA Board of Directors, inexplicably, allowed McDonald to retain her position as Executive Director of the EDA with all of her rights, privileges and duties as before, with no known restrictions as such,” paragraphs 18-B and 18-D on page seven of the nine page complaint states.
As Royal Examiner reported at the time “inexplicably” was the operative word in the Town suit’s description of EDA board and staff behavior over the following four months preceding McDonald’s resignation under mounting evidence from the EDA and County’s own investigation by contracted accounting firm Cherry Bekaert.
“The EDA Board of Directors inexplicably did not immediately fire or otherwise discipline McDonald … inexplicably did not restrict McDonald’s access to the EDA offices or her duties … inexplicably did not immediately call law enforcement to investigate McDonald or her activities … not withstanding that the Town’s auditor on that date rightfully and appropriately personally called out McDonald for committing fraud upon the Town in the presence of McDonald … the EDA’s Chairman of its Board of Directors and in the presence of the EDA’s attorney,” paragraph 18-D of the initial Town complaint reads.
But if the EDA and County Boards remained “inexplicably” oblivious to possible financial misdeeds by McDonald post-August 23, the Town did not.
“It was the Town …who almost immediately after August 23, 2018 contacted the Virginia State Police (VSP) and requested a complete law enforcement investigation of the EDA and McDonald, which the Virginia State Police immediately began, and continue to investigate to this date,” the Town complaint of June 21, 2019 reads.
The June 21st Town Complaint was served on two of those involved in that August 23, 2018 meeting: Whitten at his County Office as EDA attorney and McDonald at the Fairfax Adult Detention Center to which she was transferred from RSW Jail on June 11. The third recipient was new EDA Executive Director Doug Parsons, served at his Kendrick Lane EDA office. Parsons told Royal Examiner on July 17 that he hopes an accurate assessment of any money owed to either municipality by the EDA can be agreed upon and that the EDA will eventually be able to make right on its legally-verified debt to both the Town and County.
McDonald was arrested by VSP on May 24, after the first four of what now stands at 12 felony embezzlement and fraudulent movement of EDA assets indictments were handed down by the Warren County Special Grand Jury empanelled on April 1, 2019.
That empanelment followed a March 26 request to do so by Warren County Commonwealth Attorney Brian Madden. Madden’s request came the same day the EDA’s $17.6 million civil suit was filed. That suit is now amended up to $21.1 million the EDA is seeking recovery of from McDonald, her two real estate companies and five other surviving defendants: ITFederal and its CEO Truc “Curt” Tran; Earth Right Energy LLC and its principals Donald Poe and Justin Appleton.
A ninth defendant, former Warren County Sheriff Daniel McEathron, died on May 28 from what VSP described as “an unattended death with a firearm nearby”. McEathron was named in the suit due to his involvement in McDonald’s two real estate businesses and financial questions surrounding development of the criminal justice police training academy the EDA was involved in.
Recent motions filing in that EDA civil action will be the subject of coming Royal Examiner stories. In fact, a motions hearing on the EDA civil suit scheduled for today (Wednesday, July 17) was continued to an as-yet-undetermined date due to the judicial shuffling occurring in the wake of Judge William W. Sharpe’s July 12 recusal from all EDA matters.
At the time of the special grand jury empanelment request Madden said, “Since August of last year we have been working with the Virginia State Police as they investigated suspicious financial activities. Yesterday’s lawsuit filed by the EDA’s attorneys raises issues that are not presently being addressed by the VSP.
“In reviewing the bill of complaint most of the allegations arise from an outside investigation conducted at the EDA’s request. To date this office has not been able to review any report generated by the outside investigation,” Madden observed.
In the wake of Judge Athey’s May 22 order that EDA civil counsel produce the evidence upon which its now $21.1-million civil action is based, that is no longer true – even for the Town of Front Royal which had initially been blocked by EDA and County officials in its efforts to acquire information on the EDA fraud investigation.
Town Announces Withdrawal of its Civil Litigation Against the FR-WC EDA
At 2:12 p.m., Wednesday, November 15, the Front Royal Town Council Clerk’s office issued a press release announcing the dropping of the Town’s civil litigation against the Front Royal-Warren County Economic Development Authority (EDA, FR-WC EDA). The release portrays the withdrawn litigation as a good faith effort to reduce EDA “financial scandal”-related legal expenses ultimately falling on the shoulders of town and county taxpaying citizens. The fifth paragraph of the six-paragraph release, opening with a reference to former EDA Executive Director Jennifer McDonald, recently convicted on 34 criminal counts related to the EDA “financial scandal” in the 10th Western District of Virginia federal court, reads:
“The legal proceedings flowing from McDonald’s misdeeds have been ongoing for several years. The local community, as both town residents and county taxpayers, has already shouldered substantial legal costs. In order to prevent further financial strain on the citizens and in recognition of the actual amounts remaining in dispute between the Town of Front Royal and the EDA, the Town of Front Royal has decided to non-suit its lawsuit against the EDA. This move is intended to save public funds and reflects our commitment to the community’s welfare. We hope this gesture will be met with a similar commitment from the EDA.”
It might be noted that after the Town filed its civil litigation against and withdrew from future involvement with the jointly created EDA, the now unilaterally County-overseen EDA filed a countersuit, citing financial obligations of the Town related to the EDA “financial scandal” and projects, including funding the construction of a new town police station, done on behalf of the Town during that time-frame.
One familiar with the dueling litigations and a portion of the Town’s justification framed around the fact that town officials no longer appointed EDA board members (a voluntarily given up authority*), thus had no EDA oversight responsibilities, might wonder if a reassessment of the strength or weakness of Town’s legal position in the now-abandoned litigation might have also factored into the decision to abandon the civil suit.
But whatever the driving factor, let’s celebrate what seems a positive move toward improved County-Town relations.
* FOOTNOTE: The Town-County compromise on withdrawing the Town’s responsibility for EDA operational funding may be recalled as part of the effort to end the double-taxation of town citizens for joint Town-County operations, since town citizens are also county citizens and ended up paying taxes twice for jointly overseen operations. The EDA funding agreement was part of a move that put operational funding of jointly beneficial operations totally on the County side. As we recall, other departments where similar agreements were reached to stop town citizens from being double taxed included Fire & Rescue, Parks & Recreation, and Samuels Public Library.
McDonald Found Guilty on All 34 Criminal Counts in EDA ‘Financial Scandal’ Prosecution
Just after 1 p.m. on Wednesday, November 1, slightly over four hours after beginning deliberations on the 34 criminal counts against former Front Royal-Warren County Economic Development Authority Executive Director Jennifer Rae McDonald regarding allegedly embezzled or misdirected EDA assets, the six-man, six-woman 10th Western District of Virginia federal jury returned guilty verdicts on all 34 counts. McDonald and her two federal court-appointed attorneys sat quietly at the defense table as each charge, and each verdict was read into the court record consecutively by a court clerk.
Over the objection of lead prosecutor Sean Welsh, Judge Elizabeth K. Dillon allowed McDonald to remain free on bond under the existing guidelines under which she has been free since the 34 federal criminal indictments were handed down by a federal grand jury on August 25, 2021. As has been reported, federal prosecutors inherited the case from two state prosecutors offices, Warren County (recusal due to staff work familiarity with some defendants) and Rockingham County (complexity, time involvement). After her arrests at the state level in mid-2019, McDonald was also free on bond or home arrest for the bulk of the time since she was initially charged at the state level.
Judge Dillon cautioned McDonald, as she said she would any defendant, against violating the terms of her bond, including showing up for her sentencing hearing at an as-yet undetermined point of time, or risk facing additional criminal charges carrying as much as 10 years imprisonment and $250,000 in fines. The judge noted a common 90-day time-frame between conviction and sentencing. She gave the defense 30 days to file any post-conviction motions.
In challenging the continuation of McDonald’s bond, prosecutor Welsh pointed to conflicting stories told by two of the defense witnesses the previous day as an indicator the defendant was continuing a pattern of deception to the court to justify her actions in moving EDA assets she now stands convicted of moving fraudulently. Those witnesses were former prosecution witness and former EDA Board of Directors member Ron Llewellyn, and former post-EDA financial scandal-era McDonald employer Justin Simmons. They told conflicting stories about an incident the defense asserts happened this October 22, involving McDonald and Simmons encountering Llewellyn at a church parking lot, leading to an unpleasant verbal exchange. Llewellyn denied the encounter occurred, citing that he was out of town that day at a football game in Salem. The prosecutor asserted certain evidence about a law enforcement search of McDonald’s home property when she wasn’t there and descriptions of her state of mind from a live-stream viewing of it on her phone indicated the church parking lot incident could not have occurred that day.
Defense counsel Andrea Harris countered that the incident time-frames were not mutually exclusive of both possibly having occurred. She said there was no evidence her client posed a threat to her community or to herself, and asserted that her track record of compliance with bond conditions and court appearances with all the charges facing her, indicated she was not a flight risk.
In the wake of defense counsel Harris recounting McDonald’s track record of appearing for scheduled hearing and trial dates, other than when she was being treated medically, as noted above Judge Dillon extended McDonald’s bond conditions pending sentencing.
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 charges including bank fraud (10 counts), wire fraud (7), aggravated identity theft (1), and money laundering (16). While total EDA “financial scandal” losses have been estimated at $26-million, including $12 million in the ITFederal loan and related EDA investment, evidence presented at trial indicated McDonald moved over $5 million, perhaps as much as $6.5 million, to her personal benefit. She was initially arrested and charged criminally at the state level in mid-2019.
After a Spooky Courthouse Halloween McDonald Criminal Trial Goes to the Jury
After over four hours of closing arguments (prosecution 2:33; defense 1:32; prosecution rebuttal:21-minutes) in the wake of presentation of the defense case in less than an hour with the calling of just three witnesses, the 34-count federal criminal case against former Front Royal-Warren County Economic Development Authority Executive Director Jennifer McDonald went to the jury at 5:45 p.m. Tuesday afternoon, October 31.
But that wasn’t until after court was delayed for nearly a half hour by an alarm and recorded message: “Fire Emergency reported in the building. Please evacuate the building by the nearest exit. Do not use the elevators,” that went off repetitively for nearly a half hour after beginning at 4:45 p.m. To our knowledge, Fire and Rescue first responders found no fire in the building this Halloween day. But it was a pretty spooky interlude on the final day of the off-again, on-again trial that began on August 21 and saw two delays, the second one of a month, due to various involved party health issues.
Perhaps the most interesting legal development of the day was defense counsel Abigail Thibeault’s closing argument focus on what the prosecution had dismissed as one of the more unbelievable defendant explanations of her movement of EDA money to her own use. That was the defense-alleged secret “Voluntary Settlement Agreement” between the EDA Board of Directors and McDonald to assure her silence and non-suit over what she claimed were sexual harassment and sexual assaults by County officials, including former County Administrator Doug Stanley, among other high-profile local officials. The price of that silence was an alleged $6.5 million the defense contends was agreed to be secretly paid to McDonald, thus explaining some of the movements of EDA assets to her own use that the prosecution presented as evidence of fraud and criminal misdirection of EDA money.
“This is about sexual assault … This story is much bigger” than what the prosecution had presented to them, Thibeault told the jury of the notion that an economically and sexually privileged, male-dominated county elite had set McDonald up to take a fall for challenging their dominance.
Lead prosecutor Sean Welsh countered Thibeault’s assertions in rebuttal, telling the jury the Voluntary Settlement Agreement theory was countered by multiple pieces of evidence the prosecution had presented to them. He pointed to other prosecution witness-testified false allegations McDonald is alleged to have made to explain some of her financial transfers to achieve real estate and other transactions. Among those were Larry Tuttle’s alleged financing of several McDonald/Da Boyz LLC real estate deals he testified he had no financial assets to accomplish. Why lie about such things if there was a simple explanation, such as the EDA Board of Directors authorizing the transfer of assets to McDonald? Welsh asked the jury.
After the 10th Western District of Virginia federal courthouse building was evacuated and cleared of any fire and the prosecution’s closing rebuttal was completed, a final round of procedural instructions from Judge Elizabeth K. Dillon was given to the jury. The jury was then sent out to select a foreman and determine whether they wanted to begin deliberations immediately or return the following day. After 10 minutes, the court was informed the jury had decided to return on Wednesday to begin the final chapter of this trial. Questioned about a preferred starting time by the judge, they opted for a 9 a.m. start Wednesday morning.
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 charges including bank fraud, wire fraud, aggravated identity theft, and money laundering. Those charges are related to the alleged misdirection of an estimated $ 26 million in municipal and EDA assets to personal use and enrichment of McDonald and alleged co-conspirators.
Judge Denies ‘Renewed’ McDonald Defense Mistrial Motion – Defense Case to Open Tuesday, October 31
Following a closed evidentiary hearing Thursday afternoon, October 27, Judge Elizabeth K. Dillon denied a “renewed” defense motion for a mistrial due to repeated delays in the federal criminal prosecution of former Front Royal-Warren County Economic Development Authority Executive Director Jennifer Rae McDonald. The defense initially called for a mistrial on September 26. While taking that motion under advisement, Judge Dillon expressed a preference for the alternative of “briefly suspending the trial” to accommodate apparent health issues with the defendant and resuming it as an alternative to a mistrial. The trial is now scheduled to resume at 8 a.m. Tuesday morning, October 31, with the anticipated opening of the defense case. November 1 has also been set aside to accommodate the defense presentation, any motions, closing arguments, and jury instructions before the case is handed over to the jury for deliberations.
The scheduled start of what is expected to be a brief defense presentation, perhaps taking less than a full day with three or less witnesses being called, was again delayed on Friday, October 27. The scheduled 10th Western District of Virginia federal court starting time of 8:30 a.m. was adjusted late Thursday to a 3 p.m. Friday start. And shortly after that late Friday start and the beginning of the remote connection of several witnesses to be called during the hearing, Judge Dillon asked if either counsel wanted to request that the hearing be closed to the public.
“Yes, your honor,” was the reply from the court-appointed defense team of Andrea Harris and Abigail Thibeault. It might be noted that defendant McDonald was again not present at the defense table, as she had not been after lunch break the previous day. A clue as to that absence and the defense request for a closed hearing may have been heard during the beginning of the remote witness connection process. One of those witnesses was referred to as “doctor” and a comment concerning “the name of the patient you’ll be discussing” was made. According to the PACER court website, a total of five people testified during the closed hearing of October 27, all of them cited as doctors: “1. Dr. Miklos Szentirmai – via Zoom 2. Dr. David Saenz – via Zoom 3. Dr. John Craig Henry – via Zoom 4. Dr. Anne Bagley 5. Dr. Melanie Matson – via Zoom …”
As noted in yesterday’s story on the closing of the prosecution case and delay in opening the defense case, defense counsel told the court that their client had a cardiac pacemaker installed recently in the wake of health issues leading to a recurring elevated heart rate and blood pressure that led to a delay of a month, Sept. 26 to Oct. 26, in the trial.
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 Jennifer McDonald on charges including bank fraud, wire fraud, money laundering, and aggravated identity theft. Those charges are related to the alleged misdirection of an estimated $ 26 million in municipal and EDA assets to personal use and enrichment of McDonald and alleged co-conspirators. The latter are yet to be indicted criminally at the federal level, likely due to speedy trial issues. A number of alleged co-conspirators were charged criminally at the state level, with charges then dropped by Warren County prosecutors to prevent defense motions for dismissal due to looming speedy trial statute violations. The case has been defined as “complex” due to the amount of evidentiary material involved, cited at well over a million pages of doc
Prosecution Rests in McDonald Trial – Recent Health Procedure of Defendant Revealed as Start of Defense Case Delayed After Lunch Break
The prosecution in the federal criminal trial of former Front Royal-Warren County Economic Development Authority (FR-WC EDA, EDA) Executive Director Jennifer McDonald rested after the testimony of the final of its 57 witnesses Thursday morning, October 26. That witness was Kevin Nicholson, a Federal Bureau of Investigation (FBI) forensic accountant. In direct examination, Nicholson testified about the path of funds originating with the EDA to McDonald, as well as her husband Samuel North, that were used in a series of personal real estate and other transactions, including the paying off of various personal bills, as well as the use of ITFederal principal Truc “Curt” Tran’s name in one of those real estate transactions on property located at 2890 Buck Mountain Road.
During Monday’s hearing announcing the two-day delay of the trial to Thursday due to technical evidentiary issues, the prosecution had estimated Nicholson being on the stand for 90 minutes to two hours. After an hour and 20 minutes of direct examination tracing those multiple financial transactions the prosecution asserts were evidence of the various levels of fraud and the one aggravated identity theft charge involving Tran that McDonald is accused of, Nicholson was cross-examined for five minutes by the defense, with another two minutes of re-direct examination. During cross and re-direct examination defense and prosecution counsel sparred over the exclusion of some transactions in Nicholson’s chart references and the terminology of “loan” or “line of credit” used by Nicholson during his testimony. The defense also elicited an admission by Nicholson that he had worked with the prosecution in the assembly of some of the evidence presented in support of the prosecution’s case.
Following Nicholson’s hour and 20 minutes on the stand, the prosecution rested at 10:35 a.m. However, rather than moving directly to the opening of the defense case, the jury was dismissed as the defense filed motions for dismissal of several of the charges against their client as unproved by the prosecution evidence presented. Those dismissals involved several cases of bank and wire fraud, as well as the aggravated identity theft involving the use of Tran’s name in the Buck Mountain Road transaction. After an involved defense presentation, the prosecution argued against the standards cited by the defense, asserting that they had proved not only fraud but the use of Tran’s name to facilitate a real estate transaction they believe the bank would not have approved with only McDonald’s name attached to it.
Judge Elizabeth K. Dillon said she would need time to review some of the evidence cited in the dueling arguments, and she would reserve a decision on the defense motions for dismissal of some counts — 8 thru 10 and 14 thru 17 — “at this time.” Judge Dillon then asked if the defense was ready to present evidence in their case. This led to a brief consultation with their client, after which the defense team of Andria Harris and Abigail Thibeault asked for five minutes to consult with their client. At that point, at 10 minutes of noon, Judge Dillon called the jury back in and released them for lunch. Following the five-minute break, the judge noted that defense counsel had told her that McDonald would invoke her Fifth Amendment Constitutional right against self-incrimination, declining to testify. Judge Dillon then queried McDonald on her decision, asking if it was, in fact, her decision alone not to testify.
“Yes, mam,” McDonald responded.
The judge then overruled a prosecution objection to the calling or recalling of certain witnesses by the defense. Former EDA board member Ron Llewellyn, who had testified for the prosecution, was present in the hallway outside the courtroom as a potential defense witness. It was a situation he did not seem overly pleased about. However, Judge Dillon noted that the prosecution could object to certain lines of questioning during the disputed witness’s testimony.
Court then adjourned for lunch at 12:01 p.m. When court was reconvened at 1 p.m., the judge took both prosecution and defense counsel into chambers for discussion. The jury was brought in at 1:15 p.m. while the judge and counsel were still in chambers. Twenty minutes later, the judge and counsel returned to the courtroom. Judge Dillon then dismissed the jury, instructing them to return for an 8:30 a.m. start of the defense case the next day, adding that she anticipated the case being turned over to them for deliberations before the end of the day on Friday.
Ongoing health issues?
An unexpected piece of information was revealed by defense counsel shortly after court was convened Thursday morning at 8:30 a.m. That was that their client had recently “had a pacemaker installed” in the wake of her health issues that delayed the trial for a month, from September 26 to October 26. Those issues, according to sources, were a collapsed lung due to pneumonia and consequent raised heart rate and blood pressure that sent McDonald back to the hospital when the trial had been expected to resume in the last week of September.
McDonald was not in court with her counsel after the lunch break. One person present outside the third-floor courtroom after lunch said there had been word EMTs were present outside the courthouse. Attorneys on both sides of the aisle declined comment on whether EMTs had been summoned for the defendant. However, with her recent elevated blood pressure and heart rate issues, it might be noted that the courthouse elevator became un-operational early in the day on Thursday. While leaving for lunch break, McDonald had stepped aside to let several people following her to the stairs to pass, as she said it might take her a while to make it down. One might wonder how the long climb up those stairs after lunch might have impacted her health-wise, apparently not too long after having a pacemaker installed.
McDonald Trial Again Delayed on ‘Unanticipated Circumstances’ — But Only Till Thursday
After a delay four days short of a month (Sept. 26 to Oct. 23) due to “unforeseen circumstances” or “unforeseen health issues” depending on which attorney’s table you were describing that situation from last month, on Monday morning, October 23, the federal criminal trial of former Front Royal-Warren County Economic Development Authority Executive Director Jennifer Rae McDonald was again put on hold — though this time only for two days. Well, three if you count Tuesday, October 24, which was going to be lost anyway due to the Harrisonburg Federal Courtroom being committed to another case that day.
After court convened at 8:30 a.m. Monday morning (Oct. 23), Judge Elizabeth K. Dillon made the ruling to reschedule the trial to restart Thursday morning at 8:30 a.m. after hearing of an evidentiary situation delaying defense counsel’s ability to review some material that was apparently not transferred to the federal level from state prosecutors offices in a timely or usable manner. Lead prosecuting attorney Sean Welsh described “approximately 5,000 emails and 10,000 attachments” forwarded recently to McDonald’s federal court-appointed attorneys that apparently had what Judge Dillon described as “issues with the flash drive”. Those issues may have had to do with document encryption.
If this reporter heard correctly, lead prosecutor Welsh indicated the bulk of the new material did not directly involve the defendant. Despite that, and those flash drive issues being corrected as the prosecution noted, the defense still needed additional time to review the newly readable material to see if it impacted their defense case strategy in any way. The judge referenced a “status conference” held the previous day, Sunday, perhaps explaining defendant McDonald’s absence from the defense table again on Monday, as both sides appeared to know the trial would not be reconvened that day.
Judge Dillon closed the hearing convened at 8:30 a.m., to the public after five minutes of public discussion of the issue. The hearing was reopened about 15 minutes later at 8:50 a.m. After some discussion on the trial reconvening date, having earlier acknowledged the loss of Tuesday to another scheduled case being heard in the Harrisonburg federal courtroom, Judge Dillon said she was inclined to go with her first suggestion of Thursday morning, giving the defense ample time to review the newly available evidence.
With the prosecution down to the final of its 57 witnesses, estimated Monday to be on the stand two hours or less, and the defense likely to call just one or two witnesses, Judge Dillon forecast the 34-count criminal case against McDonald going to the jury by Friday after closing arguments. The jury was then called into the courtroom to explore their availability for deliberations through the coming weekend. Two of the 15 jurors and yet-to-be-named alternates were absent Monday due to health or travel issues. After polling the 13 jurors present, if the case proceeds as expected, in addition to Friday, jury deliberations were slated for Sunday, Monday, Tuesday, and Wednesday, October 29 through November 1, as necessary. Due to two jurors schedules, Monday deliberations would conclude at 2 p.m., and Tuesday’s at about 4:25 p.m.
With the jury released at 9:15 a.m. until Thursday morning following the deliberation scheduling, Monday’s hearing was recessed at 9:17 a.m. It was scheduled to reconvene at 1 p.m., with the prosecution and defense slated to discuss with the court technical issues moving forward, among those jury instructions.
As previously reported, with well over a million pages of documentation related to the EDA “financial scandal” the McDonald case has been labeled “complex” at the state level. That “complexity” contributed to its being handed over to the 10th Western District of Virginia Federal Court by the State Special Prosecutor’s Office in Harrisonburg/Rockingham County.
Consequently, 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 defendant Jennifer McDonald on charges including bank fraud, wire fraud, money laundering, and aggravated identity theft. Those charges are related to the alleged misdirection of an estimated $26-million in municipal and EDA assets to personal use and enrichment of McDonald and alleged co-conspirators. The latter are yet to be indicted criminally at the federal level, likely due to speedy trial issues. A number of alleged co-conspirators were charged criminally at the state level, with charges then dropped by Warren County prosecutors to prevent defense motions for dismissal due to looming speedy trial statute violations.
In addition to McDonald settling out of civil court in a “no-fault agreement” to give an estimated $9-million in real estate assets to the EDA, last year a number of alleged co-conspirators were successfully prosecuted in Warren County Circuit Court civil actions by FR-WC EDA contracted counsel. Several other people also settled out of court with the EDA. Total recovery or civil liability on paper was around $24+ million. However, several of those jury civil liability verdicts have been appealed.