Former Front Royal-Warren County Economic Development Authority Executive Director Jennifer McDonald says the government can’t make her forfeit $5.2 million as punishment for her crimes related to her former employer.

A federal grand jury indicted McDonald in the U.S. District Court for the Western District of Virginia in late August 2021 on 34 counts including money laundering, wire and bank fraud and aggravated identity theft. A federal jury found McDonald guilty of all 34 counts against her at the end of a weeks-long trial on Nov. 1.

U.S. District Judge Elizabeth K. Dillon acquitted McDonald of four counts of wire fraud. McDonald could receive more than 20 years in federal prison for the crimes. Dillon scheduled the second part of McDonald’s sentencing for May 29 in Harrisonburg. McDonald remains free on bond.

Dillon held the first part of the sentencing on April 9 to hear arguments on prosecution motions related to restitution. Witnesses testified that McDonald's action created distrust within the community of government. Witnesses also testified that McDonald's actions also rendered the EDA insolvent.

Assistant U.S. District Attorneys Sean Welsh, Andrea Broach and Rachel Swartz represent the government. Prosecutors seek a sentence of 22 years in a federal prison — 20 years for her convictions on multiple counts of wire and bank fraud and money laundering and two years for one count of aggravated identity theft. Prosecutors also request that the court order McDonald to forfeit $5,201,329 to the government and to pay $3,544,269 in restitution to the EDA.

Federal public defenders Andrea Harris and Abigail Thibeault represent McDonald. Harris filed McDonald’s opposition to the government’s request for forfeiture on Monday.

The defense attorneys argue that the government’s forfeiture request violates the defendant’s Eighth Amendment rights and that the evidence doesn’t justify the amount the prosecution seeks. McDonald’s attorneys argue in their filing that the money sought in the forfeiture is not proportional to the crimes committed.

“(The government) seeks forfeiture of a money judgment of more than $5 million dollars even though the EDA has already obtained a $9 million judgment against Ms. McDonald and seized every asset she owns, including all of her vehicles and her home,” the defense argues in its filing. "Ms. McDonald is now destitute. She is financially ruined. Particularly considering the considerable restitution amount the Court is likely to order, a forfeiture money judgment of more than $5 million dollars will ensure that she remains destitute for the rest of her life and is grossly disproportionate to her crimes.”

The proposed forfeiture is five times greater than the high-end of the fine recommendation in the sentencing guidelines in this case, the defense argues. The forfeiture amount also will interfere with McDonald’s rehabilitation and her ability to pay restitution to the victims, the defense document states.

Harris argues in the document that: the court does not have the authority to enter a personal money judgment against McDonald; forfeiture is not mandatory in this case; the forfeiture sought by the government violates the Excessive Fines clause of the Eighth Amendment; and the evidence does not support the amount the government seeks.

Prosecutors calculated their total forfeiture request by adding up funds McDonald received by way of her unauthorized real estate schemes and from wire transfers for money she spent on credit card payments.

The defense argues in its opposition that any forfeiture order should not include some of the items prosecutors use in their calculation. The roughly $1 million at the heart of two of the wire and bank fraud counts was used to buy property at 1321 Happy Creek Road. The EDA took the property as part of McDonald’s bankruptcy proceedings. The EDA has since sold the property for approximately $1.2 million. The defense argues that McDonald already forfeited the property to the United States through the federal bankruptcy process. McDonald also forfeited properties on Rileyville Road and Robinhood Lane through bankruptcy. The EDA recovered approximately $670,000 from the estate sale of the properties. The defense argues that these amounts should be credited toward any forfeiture amount sought by the government.

The defense also argues that only approximately $57,000 of the $872,230 sought by the government for payments to credit cards is attributed to the counts for which McDonald was convicted.