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Jury finds in favor of EDA in real estate scheme | Nvdaily

FRONT ROYAL — A civil court jury found a West Virginia man guilty Wednesday of playing a role in the Front Royal-Warren County Economic Development Authority’s embezzlement case against former executive director Jennifer McDonald.

Jurors unanimously found in favor of the EDA on each of its five claims against William W. “Billy” Lambert: fraud; conspiracy; conversion, similar to a criminal charge of theft; unjust enrichment; and ultra vires or action taken outside one’s authority.

Jurors awarded the EDA compensatory damages of $11,062 and $175,000 in punitive damages but none in statutory conspiracy damages against Lambert. The EDA, represented by attorney Cullen D. Seltzer, had asked for $345,000 in compensatory damages — the amount the EDA claims McDonald took and Lambert helped launder — and $175,000 in punitive damages. Seltzer told jurors they could also award three times the compensatory damages — $1.035 million — as a penalty for conspiracy.

The jury deliberated for less than an hour before reaching its verdict.

Judge Bruce D. Albertson withheld judgment and gave Lambert’s attorney Phillip S. Griffin II 30 days to file a motion to set aside the verdict; 30 days for Seltzer to file a response; and 10 days for the defense to respond to the plaintiff’s response.

The EDA claimed Lambert conspired with McDonald in a real estate scheme in which she used $345,000 of authority funds without permission to buy a house at 400 Craig Drive near Stephens City. Seltzer said McDonald diverted the money on July 24, 2014, from an EDA line of credit with United Bank to Service Title of Front Royal. As a result of the diversion, Lambert became the owner of 400 Craig Drive.

“The theft was a pretty staggering betrayal,” Seltzer said.

No one on the EDA board of directors at the time of the transaction, including Ron Llewellyn who testified for the defense, approved the use of the $345,000 to buy the property.

Lambert signed documents showing he bought the property on Aug. 7, 2014, for $320,000, the EDA claimed through its evidence. Lambert then sold the property on Feb. 5, 2015, for $270,000. In exchange for his role in the scheme, Lambert received a pay off of $11,062, according to the EDA. More than $7,000 of the total went to pay off two of his loans, Seltzer said.

Lambert testified that he dated and lived with McDonald’s sister, Kathy Butler, in Front Royal in 2014. Lambert testified that Butler told him that McDonald wanted to do a favor for a friend, and he would own a house. At the time, McDonald also worked part-time as a real estate agent for Century21 Campbell Realty, owned by her aunt and uncle, in Front Royal.

“I thought I was doing a good thing helping (Butler) help a friend,” Lambert said from the stand.

Records presented by the plaintiff and entered into evidence show that Lambert bought the Craig Drive property on Aug. 7, 2014, from David and Michele Bowers. Lambert sold the property six months later to Mark and Gina Cappo, records presented into evidence show. Lambert admitted he signed documents in his name related to the property conveyance.

Several employees of companies involved in the case testified as custodians of records to certify the authenticity of documents entered into evidence. Griffin told jurors to question why the plaintiff didn’t call anyone from other companies involved in the transaction to testify. Griffin noted that the plaintiff had listed more than 100 people as potential witnesses.

Griffin argued that the EDA had no proof that Lambert conspired with McDonald to buy the property with authority money. Griffin tried instead to persuade the jury to believe his client played no part in the scheme. The attorney pointed out that the plaintiff produced no emails, text messages or other proof that Lambert ever directly discussed the transaction with McDonald. Seltzer told jurors that most conspiracies occur in secret.

Griffin pointed out that the plaintiff sent notices to Lambert in 2019 to appear for depositions but failed to use his correct address in Mathias, West Virginia. Griffin told jurors to consider that if the plaintiff can’t get the small details correct, how can they get the major ones right.

Griffin sought to put the blame on McDonald for the various alleged schemes and that his client had no knowledge of her plans. On more than one occasion, Griffin told jurors he does not represent McDonald.

“I am not here to defend some of the dastardly things Jennifer McDonald has done to this community,” Griffin said.

Seltzer represents the EDA in its overarching lawsuit in which the RDA accuses McDonald of embezzling authority money for her financial benefit to perpetuate various schemes with other co-defendants. The EDA claims the schemes occurred as early as 2014 and continued until her forced resignation in December 2018. The EDA filed a lawsuit on March 29, 2019, in which the authority claims McDonald conspired with more than a dozen co-defendants to engage in fraudulent real estate transactions and other schemes.

The court released McDonald as a defendant in the lawsuit after granting a motion for partial final judgment. McDonald remains liable to the EDA for $9 million.

The court also has released several co-defendants from the lawsuit. The court granted EDA motions for non-suits in the co-defendants.

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