EB-5 Scandal in Small Virginia Town Draws Vivid News Story

By David North on September 30, 2019

News articles on scandals in the EB-5 (immigrant investor) program are a dime a dozen, but few start as dramatically as this one in the September 24 Washington Post:

FRONT ROYAL, Va. – before the $21 million allegedly went missing, before the sheriff put his gun in his mouth and fired, before Tuesday's announcement that the entire top tier of the Warren County [Virginia] government had been indicted, there was the dream.

The dream, the story continues, was based in part on the promise of $40 million in EB-5 investments to, among other things, convert an abandoned rayon manufacturing plant into a job-creating, new-era enterprise. A Washington-area developer, Truc "Curt" Tran, was involved, as was his once-DHS-designated middleman agency, the America Commonwealth Regional Center. DHS has sought to close the center, but he has appealed that decision.

The story is more complicated than most, as other moneys were misused, and there were several different developments in the alleged pipeline, including a regional center for training law enforcement officers, which involved the late Warren County Sheriff, Daniel T. McEathron.

The principal name encountered in this tale is Jennifer McDonald, the former director of the Warren County Economic Development Authority; a lesser player is her plumber husband, a man named Sammy North (and no relative of mine). She is one of more than 20 people indicted in the scandal.

The promise of the EB-5 money was, apparently, a hollow one and it does not appear that any of it was actually raised, according to Mike McCool, the publisher of the three-year-old local paper, the Royal Examiner. He also told me that, though Tran was very much involved in some of these transactions, he had not been indicted, but all five of the county's elected board of supervisors have been. That must be something of an indoor record.

Striking in this case, to me, was the heavy involvement of local, rather than federal, institutions. Much of the detective work was done by the Virginia State Police, the indictments were handed down in the Warren County Court, and the Royal Examiner, according to McCool, published more than 250 stories on the scandal. I read several of them and they seemed to be well researched.

But one must also give DHS credit for at least attempting to close down the regional center in an instance in which there was no federal court case to support the decision.