Former EDA Director Sentenced to 14 Years After Stealing Over $5.2 Million

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

Jennifer Rae McDonald, 45, of Front Royal, Virginia, was convicted following a 9-week jury trial in November 2023 of seven counts of wire fraud, six counts of bank fraud, sixteen counts of money laundering, and one count of aggravated identity theft.

“For more than four years, Jennifer McDonald used EDA funds as her personal piggy bank, diverting public funds to purchase real estate and to pay her personal expenses” United States Attorney Christopher R. Kavanaugh said today. “Today’s sentence reflects how serious this office takes fraud and the misuse of public funds. I am thankful to the FBI and the Virginia State Police for the tireless work they did to untangle 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 to bring her to justice.”

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 Town 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 bank accounts and credit facilities of the EDA to divert public funds to purchase real estate and to pay for her personal expenses. She falsified documents in order to mislead the EDA’s Board of Directors, external auditors, and Warren County and Front Royal government officials  so she could continue her scheme.

When confronted by law enforcement and others, McDonald drafted fake loan documents, encouraged others to lie before a grand jury and fabricated an outrageous story, alleging the fraud was part of a “secret settlement” and invented more fake documents to cover-up her fraud.

In the end, McDonald pilfered the EDA’s bank accounts and is 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 her gambling - including net losses of more than $750,000.

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

Assistant U.S. Attorneys Sean Welsh and Rachel Swartz and Trial Attorney Andrea Broach are prosecuting the case for the United States.