CLINTON COUNTY, Ind. (September 22, 2025) — A Tipton Court special judge has granted summary judgment against Clinton County Sheriff Richard Kelly, Ashley Kelly, and their company, Leonne, LLC, ordering them to pay a total of $329,360.47 for the improper issuance of funds from the Jail Commissary Fund.
The court order, filed September 17, 2025, awarded the amount, which includes $219,634.65 in pecuniary damages and $109,725.82 in audit costs, to the Plaintiff, the State of Indiana. The judgment was granted jointly and severally against Richard Kelly, Ashley Kelly, and Leonne, LLC for Count I of the complaint, which related to misfeasance or nonfeasance.
The ruling follows a motion for summary judgment heard on August 21, 2025. The court found that there was no genuine issue of material fact regarding the claim.
Audit Findings Cited
The ruling relied heavily on findings set forth in the State Board of Accounts (SBOA) Special Investigation Report B57892, which examined the financial records of the Clinton County Sheriff’s Office and Jail Commissary for the period of January 1, 2019, to September 30, 2021. The SBOA, a state agency responsible for auditing public entities, concluded that funds totaling $219,634.65 were improperly issued and deposited from the Jail Commissary Fund to Ashley Kelly and Leonne LLC.
The couple created Leonne, LLC, in which Ashley Kelly held a 51% membership and Richard Kelly held a 49% membership, for the purpose of receiving profits from the sale of commissary items.
The court found that during the audit period, 85 checks totaling $190,916.61 were improperly issued from the Jail Commissary Fund to Leonne, LLC without a required written agreement to support or authorize the payments. Additionally, checks totaling $32,967.92 were issued directly from the fund to Ashley Kelly without required written authorization. These checks were calculated as 50 percent of commissary profits on merchandise sales.
The court noted that Richard Kelly and Ashley Kelly received their respective ownership shares of payments made to Leonne from the Jail Commissary Fund.
Binding Precedent Established
The Tipton Court found itself bound by related material facts and orders set forth in a separate Declaratory Judgment Action in Tippecanoe County Circuit Court (Cause 79001-2104-PL-000035) and the subsequent Indiana Court of Appeals Order (Case No. 22A-PL-2640).
The Indiana Court of Appeals affirmed the trial court’s finding that the County must approve contracts regarding the distribution of profits from the commissary fund. The Indiana Supreme Court denied a Petition to Transfer the case filed by Sheriff Richard Kelly and the County Sheriff’s Office on or about December 7, 2023.
Indiana Code § 36-8-10-21 provides for the Sheriff’s commissary fund, but dictates that for the Sheriff to disburse profits, there must also be County approval. The court found that at all relevant times, checks issued from the Jail commissary to Leonne, LLC lacked approval from the County fiscal body as required by Ind. Code § 36-8-10-21(d)(9).
The court concluded that intent was not material to granting summary judgment on Count I (misfeasance or nonfeasance). Citing prior Indiana case law, the court stated that if funds have been misappropriated or diverted, the State may seek and secure recovery of those funds “irrespective of whether the person who wrongfully received public money knew that he or she was not lawfully entitled to receive it.”
The Plaintiff orally withdrew its pursuit of summary judgment as to Count II for treble damages under the Crime Victim’s Relief Act (CVRA) for the purposes of this motion only, reserving all rights as to both Counts II and III and all other claims against the Defendants.
In response to the court’s order, the commissioners have demanded the immediate resignation of the sheriff and his wife.
The Kellys each face three Level 6 charges in criminal court relating to issues stemming from the operation of the jail commissary. The Boone County judge hearing the criminal case has set the trail to begin on May 11, 2026.
There are two additional legal cases pending involving the Kellys. The Kellys have filed suit against Clinton County Prosecutor Anthony Sommer in Boone County and a suit involving Clinton County Attorney Thomas Little in Tippecanoe County. Both cases remain pending at the time of this article according to online court documents.
