FRANKFORT, IN — The Indiana attorney general’s office has filed a formal notice on property owned by Clinton County Sheriff Richard Kelly and his wife, Ashley, in an effort to seek restitution before their scheduled July trial on more recent charges in Marion County.
On Friday, the IAG filed the motion in connection after a judge ruled in September 2025 that the Kellys and their business, Leonne LLC, must repay $329,360.47 after an audit by the State Board of Accounts found the couple and their business had improperly issued checks from the jail commissary fund.
In a motion for entry of final judgment, Attorney General Todd Rokita said the move would allow the state to collect “the adjudicated loss and recovering the public funds misappropriated” by the Kellys.
By forcing the state to wait, the motion said, new felony fraud charges filed in Marion County, alleging Ashley Kelly lied about injuries sustained in a 2014 slip-and-fall accident while on the job as an Indiana state trooper, might limit the money the state can recoup from the earlier fraud case.
“The Defendants may have limited funds or assets that could be used to repay the judgment, and as time passes, those funds and/or assets may be spent, transferred, or otherwise dissipated, hampering Plaintiff’s ability to recoup for the loss suffered by the State in this matter,” the court filing said. “Additionally, the Defendants’ respective criminal cases in Clinton County and in Marion County are ongoing and the Plaintiff would like to secure priority of (assets) and income as soon as possible.”
Tipton Circuit Court Judge Thomas Lett granted the IAG’s motion on Monday.
On Tuesday, the IAG’s office filed the notice on a home the Kellys own on East Indiana 38 in Frankfort.
Felony conflict-of-interest and official misconduct charges filed in 2022 were triggered by the 2021 audit that found that between Jan. 1, 2019, and Sept. 30, 2021, 85 checks had been improperly issued from the jail’s commissary fund to Leonne totaling $190,916.61. In that same time frame, the SBOA found checks were also improperly issued to Ashley Kelly, totaling $32,967.92.
That was a combined total of $223,884.53, the report said, calculated as 50% of the jail commissary’s profits on merchandise sales.
The reason the issuances of the checks was improper, the SBOA said in the report, was because neither the Clinton County Council nor Board of Commissioners had approved the move, as state law requires. In a previous opinion filed on Dec. 14, 2023, the Indiana Court of Appeals ruled that approval from the county was needed before spending commissary money.
Lett said in his 2025 ruling that the Kellys and Leonne will be required to pay a total of $329,360.47, which includes the cost of the audit at $109,725.82.
In charges filed on April 9, Indiana State Police investigators said Ashley had received $205,398.77 in disability payments from the ISP Pension Trust between May 1, 2021, and March 31, 2026 — when doctors’ visits allegedly began to indicate that Ashley’s previously reported injuries to her neck and mouth were not permanent.
Although Kelly was on disability status, she remained an employee of the ISP, the affidavit filed on April 9 said, which subjected her to non-departmental employee requirements. Because of her disability status, Kelly also was subjected to further stipulations before any other employment could be approved.
In October 2018, then Sheriff-elect Richard Kelly emailed ISP Human Resources outlining the proposed job of jail matron for Ashley, the affidavit said. Stipulations were that the job would involve no uniform, no inmate contact, no duty belt, no special deputy or sworn authority, and would consist of mostly administrative duties like payroll, budgeting and supervising other civilian employees.
But ISP alleges that Ashley Kelly failed to comply with the majority of those limitations.
Police allege Kelly also failed to report her second-held role as the primary owner of Leonne LLC, a company she and her husband formed to manage the Clinton County sheriff’s office commissary. Although a non-departmental employee form was filed for her job as jail matron, one was not filed for her role in Leonne LLC, despite “clear policy requiring disclosure and approval” by ISP’s human resources department.
After receiving a complaint in 2021 from the Clinton County prosecutor’s office, a joint investigation by the ISP Organized Crime and Public Corruption Unit and the Indiana State Board of Accounts resulted in felony criminal charges against Richard and Ashley Kelly.
It was during that investigation, ISP said in the affidavit, that they were informed by Clinton County citizens and government officials that Ashley Kelly was making false disability claims to the ISP.
In January, two current deputies of the Clinton County sheriff’s office contacted ISP General Headquarters to report that Ashley Kelly was not disabled and was committing fraud against the ISP Pension Trust Fund.
When the Kellys first appeared in Marion County court for a preliminary hearing on the newest charges, a lawyer representing the couple said the four deputies named as witnesses, who have been issued protection orders against the Kellys, would work from home for the foreseeable future.
But Clinton County commissioners emphasized in an April 21 meeting that the deputies cannot work from home, which would violate the county’s policies.
“For the four individuals that work in the jail, how are they expected to work from home?” commissioners President Jordan Brewer asked. “It’s nearly impossible. Are they supposed to take inmates home with them? Do we have detectives that are supposed to take cocaine home with them? That’s against the law, right? It breaks the chain of (custody), so I don’t think there was ever any voluntary work from home that was expressed by these individuals.”
The commissioners voted unanimously to approve a nepotism policy for the county on April 21, effectively firing Ashley Kelly as the jail matron.
Shortly after the policy was passed, commissioner Bert Weaver said he was informed by a Clinton County deputy that Richard Kelly has canceled the county’s contract for the federal inmate program.
The Clinton County Jail houses more than 30 federal inmates, Weaver said, bringing revenue on average of about $100,000 a month to the county.
Weaver said the cancelation of that contract and drop in revenue will likely result in job cuts to the jail, resulting in an estimated loss of 10 to 12 jail employees.
“This tells us how nice it is that he thinks of the county. It’s all about revenge rather than looking out for the county’s best interests,” Weaver said. “This is going to have a major effect on employees.”
Jillian Ellison is a reporter for the Journal & Courier. She can be reached via email at jellison@usatodayco.com.
This article originally appeared on Lafayette Journal & Courier: Indiana AG seeks to recoup money from Clinton County sheriff’s home
Reporting by Jillian Ellison, Lafayette Journal & Courier / Lafayette Journal & Courier
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