Judge shake up threatens a second Henry bond hearing on Friday

Is ‘Missy’ Henry facing a second delay in consideration of her request for bond related to two EDA-related financial felony charges? Photo RSW Jail website

As noted in our story on the Town of Front Royal’s $12 million amendment to its June 21 civil suit for recovery of lost assets through fraudulent financial activity within operations of the Town-County Economic Development Authority, a motions hearing in the EDA’s $21.1 million civil suit was removed from the Warren County Circuit Court docket on Wednesday, July 17.

The EDA civil motions hearing joins Jennifer McDonald’s scheduled July 15 plea hearing in awaiting appointment of another 26th District Judicial District judge to replace two Warren County Circuit Court judges, Clifford L. Athey Jr. and William W. Sharp.

Athey, who has heard all the civil and criminal case hearings stemming from the EDA financial fraud investigation, is phasing out of local court duties as he prepares to join the Virginia State Appeals Court on September 1.

On July 12 Sharpe submitted a written recusal from all EDA-related cases due to his knowledge of so many involved players, including defendants and potential witnesses. That knowledge, Sharpe wrote, comes from past professional and personal associations. Assistant Commonwealth’s Attorney Bryan Layton noted some of the personal associations date to Sharpe Front Royal Rotary membership. Primary EDA defendant Jennifer McDonald held the annual Rotary president’s chair, circa 2016-17.

Rotary connections are believed to be part of the reason Judge Sharpe has recused himself from hearing all EDA-related cases. Royal Examiner File Photos/Roger Bianchini

It remained unclear Wednesday if McDonald’s former EDA Administrative Assistant Michelle “Missy” Henry’s second scheduled bond hearing would again be continued due to the absence of a judge either eligible or familiar enough with the case to render a bond decision. Circuit Court Clerk Janice Shanks has told media that it appears Judge Athey has handed the county circuit court bench over to Judge Sharpe. However, she also observed that Athey was expected to be at the courthouse Friday, July 19, when Henry’s second bond hearing is scheduled.

Athey has twice denied McDonald bond, citing her as a flight risk if she has access to even a tenth of the money cited in the EDA civil suit which seems to revolve around her actions or assertions to the EDA Board of Directors. But while McDonald is believed to have moved several million dollars to her own benefit, Henry’s charges related to the Stokes Mart buildings purchase and a B&G Goods EDA small business loan appear to involve considerably less money being directly accessed by Henry.

“MCDONALD is suspected of colluding with HENRY, LAMBERT, and possibly POE to acquire the Stokes Mart property under false pretense to facilitate several different embezzle schemes of which payments herein as repairs and maintenance for B&G or paid directly to LAMBERT are approximately $21,000,” CPA fraud investigator Cherry Bekaert wrote. A $36,000 small business loan is also referenced in that section of the EDA fraud report, though it appears one of McDonald’s real estate companies paid that loan off.

Henry was arrested on two felony counts for the “unlawful use, disposal, conversion, embezzlement of property of the EDA” on June 24, exactly one month after McDonald’s arrest on the first four of what currently stands at 12 felony financial charges related to fraudulent use of EDA assets. In Athey’s absence from court on June 25, retired substitute Judge Thomas Horne deferred a decision on Henrys’ bond request due to his unfamiliarity with the case.

At that June 25 hearing Assistant Commonwealth’s Attorney Bryan Layton argued that like her former EDA boss Jennifer McDonald, Henry should be denied bond. He pointed, not only to her believed involvement in the Stokes Mart/B&G Goods situation, but her normal administrative assistant’s role in aiding McDonald with wire transfers. Layton did acknowledge that Henry has yet to be charged related to McDonald’s alleged wire transfer frauds. Layton called the existing two charges against Henry “a betrayal of the public trust”.

“The prosecution is trying to shoehorn her on to collateral charges against the other, main defendant,” attorney Ryan Nuzzo said in rebutting Layton’s portrayal of his client on June 25.

Decision on former EDA Administrative Assistant bond deferred to mid-July

Nuzzo also pointed to Henry’s long and broad community ties. Defense counsel noted that the dates of the charges related to the B&G Goods transactions at the base of his client’s case were between October 1 and December 30, 2016 and September 1, 2014 to December 30, 2016.

“These are very old actions …If she was a flight risk she would have fled by now,” Nuzzo told the court.

Stay tuned to see if anyone is available to re-listen to those arguments and render a decision on Henry’s bond status this Friday, July 19.

The courthouse drama Friday will involve the presence or absence of a judge eligible to hear and render a decision on bond arguments for Michelle ‘Missy’ Henry.