Henry freed on $2,500 secured bond in EDA case; McDonald hearing July 31

Michelle Henry’s most recent RSW Jail mugshot, taken when she was returned for her July 19 hearing – Henry remained housed at RSW pending her July 23 bond hearing. Jail records indicate she was bonded out prior to 3 p.m. Tuesday. Photo/RSW Jail website

The only two people thus far indicted on criminal charges related to the investigation of and civil case stemming from fraudulent activities in the operations of the Front Royal-Warren County Economic Development Authority were both in court Tuesday morning.

Former EDA Administrative Assistant Michelle “Missy” Henry was granted a secured $2500 bond on the two felony embezzlement charges she was arrested for on June 24.

The granting of Henry’s bail after a month of delays brought an audible, if suppressed sigh of relief from 15 Henry family members or friends gathered in the courtroom.

Prior to Henry’s appearance, her former boss EDA Executive Director Jennifer McDonald appeared with her criminal attorney Peter Greenspun on motions hearings on what are now 14 felony embezzlement and fraudulent use of EDA resources indictments against her. The fact that two new indictments were handed down the previous day, Monday, July 22, was referenced by her attorney. Those unspecified charges date to the first three weeks of September 2018.

A hearing date of Wednesday, July 31, was set to give Assistant Commonwealth’s Attorney Bryan Layton a chance to respond to the most recent defense filing on a Bill of Particulars seeking additional detail on the charges against McDonald. That hearing appears to be pivotal in moving McDonald’s criminal cases related to the $21 million EDA civil suit forward toward trial (See related story).

A judge capable of hearing and ruling on EDA financial fraud case motions was finally present Tuesday, July 23. Consequently, motions hearing moving toward trial for Jennifer McDonald are scheduled for next week; and Michelle Henry was granted bond on her two criminal charges. Royal Examiner File Photo/Roger Bianchini

Tuesday’s McDonald and Henry motions hearings were the only items on the 9 a.m. Warren County Circuit Court docket; and they marked the first appearance of Harrisonburg-based 26th Judicial District Chief Presiding Judge Bruce D. Albertson on EDA matters. Henry has spent a month in jail as her bond hearing has twice been continued due to the flux surrounding judicial seating in Warren County Circuit Court.

McDonald criminal attorney: ‘This IS going to trial’

On June 25, the day after her arrest, retired, substitute Judge Thomas Horne deferred a decision on Henry’s bond due to his unfamiliarity with the case. That continuance was to July 19 when Judge Clifford L. Athey, who had heard all EDA-related civil and criminal cases to that point, was next scheduled to be in court. Athey is in the process of phasing out of circuit court as his September 1 move to the Virginia State Appeals Court approaches. Athey has explained that the higher court does not want him in a position of being seated there as possible appeals of lower court decisions could move up the appeals chain.

Consequently new Circuit Court Judge William W. Sharp was presiding on July 19, rather than Athey. Sharp reaffirmed his recusal from all EDA-related cases due to past personal or professional ties to potential defendants and/or witnesses, continuing Henry’s bond hearing to July 23 when Judge Albertson was available.

In arguing for his client’s bond Tuesday, Ryan Nuzzo recounted the above situation to Albertson, noting that no past decision had involved a presumption against bond for his client. Nuzzo revisited his arguments of June 25, citing both Henry’s extensive family ties to the community – 15 of her family members or friends filled the defense side of the Circuit Courtroom B public seating area for Tuesday’s hearing – as well as the financial nature of two alleged crimes dating back to 2014 to 2016; and her voluntary appearance when called as a witness before the Special Grand Jury investigating potential criminality tied to EDA operations and finances.

As to the prosecution’s arguments that Henry’s alleged crimes were a “violation of the public trust” her attorney noted she was no longer in her position with the EDA and so not able to repeat any past alleged misdeeds. Those alleged crimes involve the purchase of the Stokes Mart property; the small business loan to B&G Goods to occupy that building; and the eventual dispersal of EDA-owned assets from that failed business.

“The commonwealth could argue that they don’t know how deep the rabbit hole goes – that more indictments could be forthcoming against my client, but we can argue those at the time they occur, if they do,” Nuzzo told the court.

Nuzzo requested an unsecured bond for his client. Judge Albertson then asked were he to order a secured bond, what the defense would suggest that bond be. Henry’s attorney cited $5,000. In the end, Albertson halved that amount, setting Henry’s secured bond at $2500.

Judge Albertson agreed with the defense that Henry did not present a danger to the community, nor a flight risk were she released on bond.

Of the month-long effort to secure his client’s bond under the above-described series of judicial moves or pending moves, Nuzzo said, “Unfortunately my client became the victim of timing and a series of unfortunate events.”

Among conditions set on Henry’s bond was avoidance of contact with any EDA civil suit defendants. Nuzzo requested detail on that condition from the court. In addition to McDonald, those defendants include Earth Right Energy principals Donald Poe and Justin Appleton and ITFederal principal Truc “Curt” Tran and their associated LLC business entities. The ninth defendant named, former Sheriff Daniel McEathron, is since deceased.

The RSW Jail website indicated Henry had bonded out before 3 p.m. Tuesday.