Indiana attorney general sues Clinton County sheriff

INDIANAPOLIS (WISH) — Embattled Clinton County Sheriff Rich Kelly and his wife, Ashley Kelly, face felony criminal charges of official misconduct and conflict of interest following a State Board of Accounts audit of jail commissary money.

For the state and the county to recover the money from the Kellys, the Indiana attorney general has filed a lawsuit against them.

In July, a judge ruled that the Kelly’s could not keep $219,000 the couple had collected in jail commissary funds.

Allegations in the attorney general’s complaint outline how the Kellys set up a private corporation called Leonne LLC to manage inmate commissary funds. The Clinton County commissioners say no contract was in place for the Republican sheriff and his wife to operate the commissary, and the State Board of Accounts report found the Kellys pocketed more than $200,000.

Attorney General Todd Rokita also wants the Kellys to repay the state $109,000.00 thousand dollars for the audit.

In the complaint, the Republican attorney general writes that Rich Kelly violated the county nepotism law by hiring his wife as the jail matron. Ashley Kelly was paid a salary by the sheriff, and received compensation as the commissary manager, but, according to the complaint, her hours were not documented. Rokita writes that Ashley Kelly was receiving disability pay from the Indiana State Police at the same time.

When the initial allegations were made against Kelley, he sent I-Team a statement calling the accusations a political farse.

In a past ruling, a judge has said some commissary expenses were allowed.

The Kellys are required to have a public official bond to cover the sheriff if he fails to perform the duties of the office. Rokita’s says Rich Kelly failed to faithfully perform the duties of his office. The complaint seeks $115,000 from the bond companies. In total, the attorney general wants $434,000 from the Kellys.  

In addition to the attorney general’s complaint, Rich Kelly is facing a civil lawsuit from the Clinton County Board of Commissioners, and also criminal charges, all related the handling of jail commissary money.