FRONT ROYAL - Michelle “Missy” Henry, the Front Royal-Warren County Economic Development Authority’s former administrative assistant, was arrested by Virginia State Police on Monday on two felony counts of embezzlement, according to the Rappahannock-Shenandoah-Warren Regional Jail’s website.

The arrest came after former EDA executive director Jennifer McDonald was arrested May 23 on felony counts of embezzlement and fraud. McDonald is being held without bond at the Fairfax Adult Correction Center.

Henry is not one of the nine defendants, including McDonald, named in the EDA’s $17.6 million civil lawsuit that alleges a series of embezzlements and misappropriations. Henry resigned shortly before that lawsuit was filed in March.

However, Dan Whitten, the EDA's attorney, has noted that that the civil lawsuit could be amended to include more money or defendants.

The civil lawsuit was the result of a study by the firm Cherry Bekaert examining the EDA’s past finances. The amount of money in the alleged embezzlement increased to about $21.1 million when a report Cherry Bekaert complied was released earlier this month.

In the report, Henry’s name is mentioned repeatedly in an allegation involving the B&G Goods store.

According to the report, the EDA gave the store a loan of about $39,000. When the store closed, the report states that McDonald told the EDA board that the loan was satisfied when the store’s owner turned over a van and inventory.

The report states that Henry and McDonald went on to sell the inventory in a “yard sale” and took the proceeds for their personal use. That yard sale is detailed through text messages exchanged between McDonald and Henry in which the two discuss how they will split the proceeds.

Henry is due to appear at 9 a.m. today in Warren County Circuit Court. She was being held without bond at the RSW jail as of Monday evening.

– Contact Josh Gully at