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Attorney General files lawsuit against Clinton County sheriff, wife to recoup taxpayer money

The lawsuit comes in response to an audit by the Indiana State Board of Accounts from the period of January 2019 to September 2021
Sheriff Rich Kelly.jpg
Posted at 9:09 AM, Mar 31, 2023

CLINTON COUNTY — The Indiana Attorney General’s office filed a lawsuit this week against the Clinton County sheriff and his wife, seeking to recoup $329,360 on behalf of the taxpayers.

Named as defendants are Clinton County Sheriff Richard Kelly, his wife Ashley Kelly, and Leonne LLC, a company they created to operate jail commissary and receive its profits, according to court records.

The lawsuit comes in response to an audit by the Indiana State Board of Accounts from the period of January 2019 to September 2021.

Auditors found the Ashley Kelly improperly received checks from the jail’s commissary fund, records show.

SBOA also found that Clinton County never entered into a written agreement with Leonne LLC.

“Richard Kelly, Ashley Kelly, and Leonne, LLC, wrongfully diverted, failed to account for, and wrongfully retained and misappropriated public funds, and/or illegally expended public monies,” read the lawsuit filed March 30.

The lawsuit also alleges Sheriff Kelly violated the state’s anti-nepotism policy when he hired his wife to work as the jail matron and manager of the jail commissary without properly disclosing their marital status on conflict disclosure forms.

Both Kellys are still employed with the Clinton County Sheriff’s Office, according to their website.

Sheriff Kelly is charged with one count of Conflict of Interest and three counts of Official Misconduct.

WRTV Investigates contacted Sheriff Kelly via email and also contacted his attorney, and we are waiting to hear back.

Ashley Kelly is also charged with one count of Conflict of Interest and three counts of Official Misconduct.

WRTV Investigates contacted Ashley Kelly’s attorney and we are waiting to hear back.

The criminal cases are still pending.

The State Board of Accounts says it incurred additional audit costs in the amount of $109,725.82.

Richard Kelly responded to the charges in a statement in 2022, calling them "nothing more than a political farce."

The following statement was released on his behalf:

"Given the timeline of events, this is nothing more than a political farse. The items being contested are still in civil litigation in Tippecanoe County Court and are the same contained in the SBOA findings from last year and our subsequent response. My wife and I look forward to continuing our efforts to increase public safety with the hiring of new deputies and jail staff, made possible by the nearly $1,500,000 federal inmate project that we brought into the community in 2020. We plan on announcing our medical savings to the county of over $388,000 for 2021 in the next week. We also look forward to expanding our jail programs to a Jail Chemical Addiction Program (JCAP) that will incorporate more services to the recovery of inmates. We will continue our successful programs, saving taxpayers money, reducing recidivism and providing state of the art technology, equipment and training to all members of our agency."