FRONT ROYAL — Michelle “Missy” Henry, the Front Royal-Warren County Economic Development Authority’s former administrative assistant, is being held at the Loudoun County Adult Detention Center without bond on two felony counts of embezzlement.

Russ Gilkison, superintendent of the Rappahannock-Shenandoah-Warren Regional Jail, confirmed that Henry was transferred to Loudoun County on Tuesday due to the high-profile nature of the case. He said being transferred will allow Henry to be held in the jail’s general population and not have to be in protective custody.

Henry was arrested Monday evening after being indicted by the special grand jury investigating potential misappropriations within the EDA, town, county, schools and the Sheriff’s Office.

Judge Thomas Horne, who is retired and was substituting Tuesday in circuit court, opted to leave the decision whether to grant Henry bond up to Judge Clifford L. Athey Jr., who will return July 19. It was Athey who denied bond to Jennifer McDonald, the EDA’s former executive director and only other individual indicted by the special grand jury.

Just before the special grand jury was empaneled, the EDA in March filed a $17.6 million embezzlement and misappropriation civil lawsuit against McDonald and eight other defendants. Henry was not one of them. That lawsuit was filed after the firm Cherry Bekaert performed a study of the EDA’s finances during McDonald’s tenure. Henry resigned from her role as an administrative assistant shortly before the civil lawsuit was filed.

McDonald now stands indicted on 12 felony charges — for alleged offenses occurring between September 2014 and November 2018 — including eight counts of embezzlement and four counts of obtaining money by false pretenses.

Bryan Layton, assistant commonwealth attorney, said that Henry was essentially McDonald’s “right hand” and that two of McDonald’s indictments “correspond” with Henry’s indictments. He added that some of the charges against McDonald “relate to wire transfers” in which Henry usually had a role but that she “has not yet been charged for that.”

While Henry was not a defendant in the civil suit, her name is mentioned in Cherry Bekaert’s recently released report, which increased the amount of alleged embezzlement at the EDA to $21.1 million. According to that report, Henry was allegedly involved in embezzlement that occurred at the B&G Goods store.

According to Cherry Bekaert’s report, McDonald, Henry and possibly others are suspected of colluding to use the B&G Goods store to embezzle money.

The report states that the EDA purchased the building at 506 E. Main St. in September 2014 “for the alleged purpose of business development with B&G Goods.” The report states that B&G was supposed to pay rent “to offset the cost of debt service.”

According to the report, B&G Goods opened in April 2015 and closed in November 2016. In October 2015 and February 2016, the report states that the EDA gave the store two loans totaling $39,900. In April 2017, the report states that the EDA board was told by McDonald that those loans were satisfied when B&G Goods’ owner turned over the store’s inventory and a van in lieu of cash payments.

In December 2016, DaBoyz LLC — which was owned by McDonald and former Warren County Sheriff Daniel McEathron — wrote a $35,231 check to the EDA with the memo line stating “pay off B&G.” DaBoyz is mentioned throughout the EDA’s civil lawsuit and is accused of using town and county credit lines for personal land purchases.

The report details several text messages between McDonald and Henry during which they discuss selling the B&G Goods inventory and keeping the proceeds. When interviewed about the texts, the report states that Henry admitted to having invested $7,000 in the store and that McDonald also invested.

Instead of selling the inventory and placing the proceeds in the EDA’s coffers, the report states that McDonald and Henry held a “yard sale” and kept the money for personal use.

Ryan Nuzzo, Henry’s lawyer, said that her involvement in the alleged misappropriations at the EDA was “collateral” and that McDonald is the “main culprit” and the special grand jury’s primary target. He said that the prosecution is attempting to “shoehorn” charges onto Henry even though she was just on the peripherals of a much larger crime.

Henry should be granted bond, Nuzzo said, for reasons including that her husband has significant back issues and she cares for him. Nuzzo said the case against Henry will be “discovery-oriented,” involving many documents, and she needs to be out of jail to put up her best defense.

He added that Henry has no criminal history and she “has been cooperative with the special grand jury.”

Nuzzo also noted that Henry has a multitude of supporting friends and family, many of whom were present in court, and she has lived in the same house since 1990.

“She is not going anywhere; she is not a flight risk,” Nuzzo said. “If she were a flight risk, she would have run by now.”

Layton said that even though Henry has been charged with “property crime,” she should be held without bond due to the “totality of circumstances.”