Warren County EDA vs. April Petty: First in string of EDA civil case trials this month poised to start Wednesday

Jury selection followed by motions arguments on admissibility of evidence and witness testimony in the Front Royal-Warren County Economic Development Authority versus April Petty civil case began Tuesday morning in Warren County Circuit Court. The first in a series of EDA civil liability trials beginning this month accuses April Petty of receiving a $125,000 check written by former EDA Executive Director Jennifer McDonald to pay off the balance on her home mortgage as part of the sales process on Petty’s home in which McDonald was acting as Petty’s real estate sales agent in her employment role with Campbell Realty.

McDonald is the central figure in the $21-million EDA financial scandal that erupted in 2018-2019. The EDA is seeking recovery of that $125,000 it alleges was an unauthorized transfer of EDA assets.

A two-day EDA civil liability trial is slated to begin Wednesday morning at 9:00 a.m.

As became apparent during the motions arguments, Petty and her defense counsel William Shmidheiser do not deny Petty’s receipt of the money from McDonald. However, the center of the defense case is that Petty had no idea the check she received from McDonald was, as alleged by the EDA’s civil case attorneys from the Richmond-based Sands Anderson law firm, an unauthorized transfer of EDA assets by McDonald.

Consequently, much of the motions arguments from the defense side made to presiding Judge Bruce D. Albertson surrounded the idea that like a preponderance of EDA, County, and Town officials between 2014 and 2018, April Petty was deceived by Jennifer McDonald. The difference noted by plaintiff’s lead counsel Cullen Seltzer is that unlike the EDA, Town or County, Petty benefited financially from that deception, rather than suffer an unauthorized loss of assets.

Much of the back and forth between plaintiff and defense counsel during admissibility arguments surrounded the plaintiff’s notion of a conspiracy between McDonald and co-defendants to misdirect EDA assets. Shmidheiser noted that his client was one co-defendant who had not been indicted criminally before the criminal cases were passed, first to a Special State, then Federal Prosecutor’s office.

McDonald has settled the EDA civil claims against her, though with a “no-fault” condition in which she does not admit to any wrongdoing in acquiring the real estate used to settle those claims. Her federal criminal trial was recently pushed from October-November of this year to May of 2023.

In earlier pre-trial motions hearings defense counsel Shmidheiser has argued that his client did not receive an “unjust enrichment” from what EDA counsel asserts was an unauthorized transfer of EDA money, because in the end she deeded her home to buyers Christopher and Tasha Leary. Or as Shmidheiser has argued in those earlier hearings, and is likely to again over the next two days – “In exchange for that $125,000 check, plus another $210,000 at Closing” his client deeded her house, which had been listed for $330,000, to Mr. and Mrs. Leary. – “She didn’t get money for nothing, she got money for her house.”

Prior to the extensive motions arguments on evidentiary and witness testimony admissibility at trial which extended late into the afternoon, beginning at 8:30 am a jury pool of 38 was reduced to 7 with 2 alternates. The selected jurors were dismissed at 11 am prior to the motions arguments with instructions to avoid further discussion or social media or news references to the EDA-Petty case and surrounding issues. They were told to report to the courthouse at 8:40 a.m. Wednesday for the trial slated for a 9:00 a.m. start and anticipated to continue into Thursday.

A potential witness list including Jennifer McDonald, former County Administrator Doug Stanley, former EDA Board Chairman Greg Drescher, former County and EDA attorney Dan Whitten, five county supervisors in place in 2018 – Dan Murray, Tony Carter, Ron Llewellyn, Archie Fox, and Tom Sayre, among others were cited during Tuesday’s pre-trial discussion. Sayre entered the courtroom and stood at the back for a short time listening to an early portion of the proceedings during the jury selection process.

EDA civil liability cases on the horizon listed on the Courthouse hallway agenda board for the 8:30 a.m. docket, included Donald Poe, Justin Appleton, Samuel North, Truc “Curt” Tran, and ITFederal, among others.