- Associated Press - Tuesday, August 26, 2014

WEST LIBERTY, Ky. (AP) - Circular saws squealed and construction workers hammered away on buildings, part of this Appalachian area’s painstaking recovery from a deadly 2012 tornado.

About 60 miles away, inside in a federal courtroom Tuesday in Lexington, the elected official who led the reconstruction in Morgan County sobbed as he pleaded guilty to a fraud charge stemming from a kickback scheme.

Judge-Executive Tim Conley, the county’s top official, received $120,000 to $200,000 to steer work to a contractor in a scheme that started three years before the tornado and continued while the town struggled to rebuild, prosecutors said. Conley could spend years in prison.

His supporters had a hard time believing the three-term Republican had gone astray.

“Everybody respected Tim Conley,” said Morgan County resident Steve Gullett. “I just didn’t think that he’d be caught up in something like this. It’s heartbreaking.”

The recovery has been slow in West Liberty, the county seat ravaged by a tornado on March 2, 2012. The new judicial center has opened, and a few businesses have sprung up downtown. A bank that anchored downtown is being rebuilt, but construction is in its early phases, leaving a massive gap in the tiny downtown.

Local residents said Conley had been a good leader but had violated the trust of his constituents.

“If he did it, he needs to serve time,” William Joseph said during a quick break from construction work on a new food pantry. “I like the guy, but if he’s going to do things like that, he ought to pay the price for it.”

U.S. Attorney Kerry B. Harvey said in a statement this was not a one-time lapse in judgment.

“Mr. Conley essentially transformed the public office he held to a criminal enterprise in order to serve his own purposes. The people of Morgan County deserved better,” he said.

The twister killed six people in Morgan County, part of an outbreak of tornadoes that killed 25 people statewide.

Standing before U.S. District Judge Gregory F. Van Tatenhove, Conley choked up with emotion as he pleaded guilty to one count of mail fraud. Conley, 49, said he took full responsibility for his actions.

Conley was indicted on four counts of mail fraud as well as theft and conspiring to launder money charges. As part of his plea agreement, prosecutors agreed to drop the other charges.

The mail fraud charge carries a maximum sentence of 20 years in prison and a fine up to $250,000. Conley is hoping for a substantially lower sentence, his attorney Michael Murphy said.

“This is an unfortunate chapter in Judge Conley’s life, and he wants to put it behind him,” Murphy said.

Conley gave “quite a bit” of the money to residents, including some tornado victims, Murphy said. He declined to elaborate, saying more of the details would come out before Conley’s Dec. 2 sentencing.

The scheme involved Conley, a Republican, and PBTHNOJJ Construction - which stands for Praise Be the Holy Name of Jesus and Jehovah Construction.

In 2013, for example, Conley secretly altered bid documents for three bridges to ensure that PBTHNOJJ would win the contracts, prosecutors said. Conley solicited $15,000 per bridge and accepted $45,000 in cash from Kenneth Gambill, owner and president of the business, prosecutors said.

The mail fraud charge stemmed from Conley’s letter in August 2013 to the Kentucky Transportation Cabinet. The letter advised state officials that PBTHNOJJ had completed the three bridges and sought payment, prosecutors said.

As a result of the scheme, PBTHNOJJ got about $1.1 million in contracts, according to court documents.

Conley ran unopposed in the spring GOP primary. Murphy said Conley hopes to finish out his term. He will withdraw from the general election in November.

Gambill and his wife, an executive at PBTHNOJJ, pleaded guilty last month. Their sentencing was set for November.

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