In a major legal development, a Clinton County judge has ordered Sheriff Rich Kelly, his wife Ashley Kelly, and their company Leonne, LLC to repay $329,360.47 after determining they improperly took profits from the county jail commissary fund without following state law.
The ruling, issued as a partial summary judgment from special judge Thomas Lett is the latest chapter in a years-long dispute over how commissary funds have been handled during Kelly’s tenure as sheriff. The case has been closely watched by county officials, taxpayers, and law enforcement agencies across Indiana because it addresses how jail commissary profits which is money generated from selling snacks, hygiene products, and other items to inmates are legally supposed to be managed.
The State Board of Accounts (SBOA), Indiana’s public finance watchdog, conducted a special investigation of the Clinton County Jail commissary covering January 2019 through September 2021. Its report found 85 checks totaling $190,916.61 were written from the commissary fund to Leonne, LLC, a private company co-owned by Sheriff Kelly (49%) and Ashley Kelly (51%). $32,967.92 in additional checks were issued directly to Ashley Kelly. At least $28,718.04 of that was deposited into personal accounts. The total of $223,884.53 represented 50 percent of commissary profits — but there was no written agreement approved by the Clinton County Council or Board of Commissioners, as state law requires. The court adopted these findings, noting that under Indiana Code § 36-8-10-21, a sheriff cannot spend or distribute commissary profits without approval from the county’s fiscal body.
After reviewing the evidence, including past rulings in related cases, the judge ruled there was “no genuine issue of material fact” meaning the facts were so clear that a trial was unnecessary for this part of the case. The judge ordered Kelly, his wife Ashley and Leonne, LLC to pay: $219,634.65 in damages and $109,725.82 to cover the cost of the state audit for a combined total: $329,360.47.
The court’s decision was guided by prior legal battles over this issue. A Tippecanoe County court had previously ruled that county approval was necessary before spending commissary funds. That ruling was later affirmed by the Indiana Court of Appeals, and the Indiana Supreme Court declined to hear a further appeal last December — effectively cementing the finding that Sheriff Kelly’s office acted outside its authority. This ruling only resolves Count I of the county’s lawsuit, which deals with misfeasance and nonfeasance — legal terms for failing to perform required duties or performing them improperly.
Two other counts remain active. Count II seeks treble damages under the Indiana Crime Victims Relief Act, which could triple the financial penalty if a court finds the defendants acted intentionally. Count III involves additional claims that could bring further liability. The judge specifically left open the question of whether Sheriff Kelly and his wife intentionally caused the losses, meaning the case is not over and additional hearings are likely.
KNS News has reached out to the Kelly’s for a comment along with Clinton County Commissioners and County Council leadership. Any statements shared will be posted at this website.