FRONT ROYAL - Three more of the 15 defendants in the Front Royal-Warren County Economic Development Authority's $21.3 million civil lawsuit recently filed motions seeking that the allegations leveled against them be dismissed.
Within the last two weeks, lawyers for former EDA Administrative Assistant Michelle Henry, Jesse Poe and April Petty filed motions for dismissal, joining the growing list of defendants proclaiming innocence and seeking dismissals.
As previously reported, other defendants who have filed motions for dismissal include Donald Poe and his business Earth Right Energy Solar-Commercial LLC, Curt Tran and his company ITFederal LLC, and former B&G Goods store owner William Lambert.
The EDA's lawsuit claims that Petty and Poe are "associate[s] in the financial affairs" of former EDA Executive Director Jennifer McDonald, who has been charged on 32 felony counts related to alleged financial improprieties during her decade long tenure at the authority.
A motion for dismissal filed by Henry's lawyer states that she "is only mentioned in 13 paragraphs" out of the EDA's 253-paragraph complaint and the "only specific factual allegations" is that she was the EDA's "keeper of records."
The EDA's complaint against Henry - who has been charged on two felony counts of embezzlement - is that she "either deliberately or negligently failed to detect and report" McDonald's fraudulent schemes. The request for dismissal adds that the EDA has failed to allege "a claim against Henry."
"Negligently failing to uncover fraud is not a cause of action against an employee," the filing states.
A response by the EDA's lawyers states that "while on the EDA payroll, Henry was an active participant in the ongoing conspiracy."
Allegations against Jesse Poe in the EDA's complaint include the following passage: "Using $280,000 from the Warren EDA, by a check delivered by Defendant McDonald, Defendant Jesse Poe purchased a home at 118 Jutland Court" in Stephens City.
Poe's motion for dismissal states that the check was not directly issued to Poe and the EDA has not alleged that he "was aware that the source of funds for the purchase of his house was, two or three steps removed, from the Warren EDA" or that he facilitated McDonald's actions.
The EDA's lawyer responded that "it can be reasonably inferred that [Poe] knew that he had received $280,000 towards the purchase of the property...and should have reasonably known that he would be expected to repay the funds."
The EDA's allegations against Petty include the assertion that McDonald misappropriated $125,000 of EDA money to make a mortgage payment on Petty's home.
William Shmidheiser, Petty's lawyer, previously laid out a complicated scheme in which McDonald served as Petty's real estate agent for the sale of her house.
Shmidheiser said that McDonald told Petty a buyer would pay her $329,900 asking price and the buyer "had cash from the prior sale of their own house" and wanted to put up a $125,000 deposit.
He added that McDonald must have falsely told the home buyers that Petty was in financial trouble and that $70,000 would be knocked off the asking price if they made a $50,000 payment on her mortgage. He alleges that McDonald must have kept the $50,000 and had the EDA issue a $125,000 check to cover her embezzlement.
In the motion for dismissal, Shmidheiser states that the EDA has not alleged that Petty "had anything to do with the issuance of a check by the Warren EDA, nor that she was aware of anything improper which Jennifer McDonald had done."
The EDA's response states that Petty knew she "was receiving the benefit of a $125,000 payment to significantly reduce the amount owed on her mortgage because, absent some familial or special relationship, it is unreasonable for a person to accept a $125,000 payment towards their mortgage and not expect to repay the funds."