NORTH HAVERHILL — Prosecutors have dropped charges against a couple who were accused of receiving $12,000 in stolen money from a Hanover nonprofit for military veterans.

In documents filed Thursday, Grafton County Assistant Attorney John Bell said the state has decided “to forgo prosecution” against Sarah Healey Donahue and her husband, Alexander Donahue. The couple were facing charges of receiving stolen property after prosecutors say they accepted two checks from Alexander Donahue’s mother, Danielle Goodwin, to buy a house. Goodwin stole the money from Project VetCare, a nonprofit organization for military veterans, which she co-founded.

Prosecutors noted several reasons for the decision last week, including Goodwin’s “inconsistent and conflicting testimony” at the Donahues’ first trial in 2019 and feedback from jurors at the trial, Grafton County Attorney Marcie Hornick said Monday.

“The jury panel was deeply split as to whom to hold responsible for the crimes,” she said.

She said that prosecutors faced “evidentiary challenges” in the case and that continuing to pursue the charges would place a financial burden on the state.

The decision marks an end to a three-year-old case, which began in 2017 when prosecutors indicted Goodwin for theft from her organization. She pleaded guilty in 2018 to bilking a total of $99,500 from the organization over the course of several years and was ordered to pay restitution and serve prison time.

Several months later, prosecutors indicted Sarah and Alexander Donahue, and planned to have Goodwin testify against them at their trial. But they quickly ran into problems with her testimony.

First, Goodwin told police in a 2018 interview that she instructed Sarah Donahue to write two checks to herself from Project VetCare and that she knew the money was not hers to give away, according to a motion filed by Bell last year.

Then, in a phone call Goodwin made from prison a month after the interview, she was recorded saying “any mother worth half her weight would fall on her sword all day long.”

Despite the call, prosecutors still had Goodwin testify at the Donahues’ 2019 trial, during which she contradicted her earlier interview with police, Bell’s motion said. Instead, she testified the money was hers to give away because Project VetCare owed her money, according to the motion.

A jury acquitted Alexander Donahue of one count of theft by unauthorized taking and was hung on the remaining counts. Prosecutors planned to pursue the remaining charge againts the couple of receiving stolen property at a second trial this year.

But Goodwin’s contradictory testimony posed a problem for Bell, who said in a November motion that she was unable to testify because she had “self-incrimination” issues and that might be at risk of committing perjury if she took the stand at the second trial.

Much of last week’s decision to drop the charges stemmed from that first trial, and from not having Goodwin’s in-person testimony at the upcoming trial, which Hornick said would have been a “crucial” part of pursuing the charges against the Donahues.

Charles Teale, an attorney representing Sarah Donahue, said in an email that he’s happy about the outcome, adding that Sarah Donahue has “maintained her innocence from the beginning.”

Alexander Donahue’s attorney Keith Matthews echoed his words, saying that he’s glad his client has gotten justice.

“It’s been a long road,” Matthews said Monday.

Last week, a judge agreed to impose nine more months of a previously suspended jail sentence for Goodwin, after prosecutors argued that she violated the terms of her plea deal in her contradictory testimony.

Anna Merriman can be reached at amerriman@vnews.com or 603-727-3216.