- Associated Press - Tuesday, January 14, 2014

FRANKFORT, Ky. (AP) - An eastern Kentucky sheriff accused of mismanaging his office’s finances arrested his county’s judge-executive and treasurer on Tuesday, accusing them of committing a host of crimes, including tampering with public records.

A state audit last year found that Jackson County Sheriff Denny Peyman’s office had a deficit of $112,889 in 2012. The county’s fiscal court took control of the office’s budget in fall 2012, though Peyman remained sheriff.

Peyman arrested Judge-Executive William O. Smith, the county’s top-elected official, as the fiscal court was preparing to go into a closed session. He arrested County Treasurer Beth Sallee a short time later.

“I’ve got the proof,” the embattled sheriff said in a phone interview. “Obviously these are pretty serious charges. They’re not just frivolous charges.”

Peyman, in his first term as sheriff, said the arrests were not motivated by disagreements with any county officials.

“Politics has nothing to do with it,” he said.

Both officials spent about two hours in the Jackson County Detention Center before being released on their own recognizance, said detention center administrator Dorsey Creech. Neither Smith nor Sallee immediately returned phone calls seeking comment Tuesday.

The sheriff charged each man with tampering with public records, second-degree forgery, falsifying business records, abuse of a public trust and engaging in organized crime.

Peyman said he took them to jail in a “beat up” Mustang because his squad car is broken down.

“They don’t give me any money to work with,” Peyman said, adding that he has just one staff assistant and pays for the squad car’s insurance, fuel and repairs out of his own pocket.

The audit also said it found instances when the sheriff failed to ensure expenditures were for official business and failed to adequately monitor fuel purchases. The sheriff’s office also owed the fiscal court $277,919 in payroll assistance, the audit said.

Smith previously told the Lexington Herald-Leader that the dispute would probably end up in court.

“We have to get our money from the sheriff’s office,” Smith told the newspaper. “It has caused us to get behind in certain areas, like our retirement system.”

All charges against Smith and Sallee are felonies except for the falsifying charge. Their arraignment is set for Feb. 3 in Jackson County District Court.

The sheriff declined to discuss details of what prompted the charges, saying the case remains active.

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