Morgan County Judge-Executive pleads not guilty in court

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MORGAN COUNTY, Ky. (WKYT) UPDATE: Tuesday afternoon, Conley pleaded not guilty on all counts. We're told he's being released on home incarceration.
ORIGINAL STORY: An eastern Kentucky Judge-executive is in federal custody and will appear in federal court Tuesday afternoon for his arraignment.

Morgan County Judge-Executive Tim Conley, elected in 2003, was arrested and charged with four counts of mail fraud, one count of theft from a program receiving federal funds, and one count of conspiring to launder money.

The news comes just months after FBI agents raided Conley's Morgan County home and office.

That indictment states that Judge Conley accepted gifts and payment from Kenneth Lee Gambill and Ruth Gambill, owners of a Salyersville construction company, in exchange for construction projects in Morgan County.

Investigators say Conley rigged the competitive bidding process in order to select Gambill's construction company. In the indictment, Conley is alleged to have unsealed competing bids and even altered bids for Gambill's company to help them win contracts.

They claimed Gambill received approximately $1.1 million from his contracts with the county, from 2009 all the way up through August of this year.

In that time, it's said that Conley would meet Gambill away from his office to accept the cash payments.

People living in Morgan County were shocked to hear of his arrest.

"We've been through a lot, and I don't think anybody really wanted something like this to happen. And I like Tim very much, the judge, and he's very well-liked in this community and we're pretty heart-broken over it," noted Morgan County resident and optometrist Kent Nickell.

The indictment claimed Gambill's construction company, PBTHNOJJ Construction, also received contracts to clean up tornado debris, but the federal payments were in excess of the clean up work actually preformed.

Kenneth Gambill is expected to be arraigned on December 30th, and the US Attorneys say there is no word on when Ruth Gambill will first appear in court.

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