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Local students shine as James Madison University announces its spring 2024 graduates and honors graduates

Local students shine as James Madison University announces its spring 2024 graduates and honors graduates

Below is a press release issued by the U.S. Attorney’s Office for the Western District of Virginia on May 29, the day of Jennifer McDonald’s sentencing at the Harrisonburg federal courthouse. It offers the prosecution’s perspective on the nature of the crimes committed by the former executive director of the Front Royal-Warren County Economic Development Authority, which centered on the unauthorized diversion for personal use of cash of the EDA and recognizes the work of federal and state authorities on the case.

According to testimony heard at trial, the total amount embezzled for his personal use was between $5 million and $6.5 million. Here he is cited at $5.2 million, no coincidence that the amount requested by the prosecution at Wednesday’s sentencing hearing and received from the court is to be forfeited by McDonald as part of his conviction. It was explained that the “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 to have been diverted to fraudulent uses during the EDA “financial scandal” between 2014 and 2018 was estimated at approximately $26 million. On paper, in civil suits and out-of-court settlements, the EDA recovered about $20 million, tempered by about $8 million in legal fees. However, most jury liability verdicts in civil cases, totaling about $20 million, are appealed by defendants (see the Royal Examiner’s “EDA in Focus” news category for more details on these cases). To resolve the tort claims against her, McDonald deeded to the EDA an estimated $9 million in real estate owned by one of her real estate LLCs.

Here is the full press release from the Federal Prosecutor’s Office:

Jennifer McDonald used EDA funds as her ‘personal piggy bank’

HARRISONBURG, Va. – The former executive director of the Front Royal and Warren County Economic Development Authority (EDA), who was convicted in November of last year of stealing more than $5 million of authority funds, was sentenced today to 14 years in prison. federal prison.

Jennifer Rae McDonald, 45, of Front Royal, Virginia, was convicted following a nine-week jury trial in November 2023 on seven counts of wire fraud, six counts of fraud banking, sixteen counts of money laundering and one count of aggravated identity theft. .

The Western District of Virginia federal courthouse in Harrisonburg, where Jennifer McDonald was tried last year and sentenced this week. Below, McDonald at work during an EDA board meeting with then-president Patty Wines to his left. After her death, Wines became a key figure in the McDonald’s defense account that she was awarded a secret $6.5 million payment from the EDA, approved by Wines for failing to file charges for sexual assault against high-ranking male county staff.

Jennifer McDonald, right, and then FR-WC EDA board president Patty Wines were on the job the first few days.

“For more than four years, Jennifer McDonald used EDA funds as her personal piggy bank, misusing public funds to purchase real estate and pay her personal expenses,” United States Attorney Christopher R. Kavanaugh said today . “Today’s sentence reflects the seriousness with which this office takes fraud and misuse of public funds. I am grateful to the FBI and Virginia State Police for their tireless work in unraveling 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 bring her to justice.

The FBI and VSP are on site at EDA headquarters on April 16, 2019, approximately four months after McDonald’s emailed resignation on December 20, under increased scrutiny from its board of directors. The McDonald’s office and work computer were searched for evidence that could be 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 City 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 EDA’s bank accounts and credit facilities to misappropriate public funds to purchase real estate and to pay personal expenses. She falsified documents in order to mislead the EDA Board of Directors, external auditors, and Warren County and Front Royal government officials so that she could proceed with her project.

When confronted by law enforcement and others, McDonald made false loan documents, encouraged others to lie before a grand jury, and fabricated a scandalous story, alleging that the fraud was part of a “secret settlement” and invented more false documents to cover up his fraud. .

Ultimately, McDonald stole the EDA’s bank accounts and was 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 his gambling, including net losses of more than $750,000.

In January 2018, McDonald posed in her office with what she told the reporter: She had won receipts totaling about $1.8 million playing slot machines at the Hollywood Casino at the Charles Town Racetrack in over the previous three years. Evidence presented at trial indicated that his luck ran the other way, partly explaining his decision to divert EDA assets for his personal use, including high-value real estate deals that were beginning to attract attention.

The Federal Bureau of Investigation and Virginia State Police investigated the case.

Assistant U.S. Attorneys Sean Welsh and Rachel Swartz and Attorney Andrea Broach are prosecuting the case for the United States. Updated May 29, 2024