ONLY ONLINE: Sheriff’s Chief Deputy wore wire for FBI during gun investigation

Following the alleged break-in of the Whitley County Sheriff’s Department on Dec. 21, 2009, after which several guns and drugs were reported missing, Whitley County Sheriff’s Chief Deputy Tim Shelley wore a wire for federal officials while talking with his boss, then Whitley County Sheriff Lawrence Hodge.

On Jan. 15, 2010, Shelley wore an electronic recording device that the FBI had outfitted him with in an effort to gain additional information from Hodge, according to a 95-page affidavit filed in federal court last week by ATF Special Agent Todd Tremaine.
During Shelley’s discussions with Hodge, Hodge admitted taking one knife that authorities seized while executing a search warrant on June 13, 2004, at the home of Richard "Rick" Benson where several guns and knives were confiscated.
During the conversation, Hodge told Shelley that the knives from the Benson case were not logged into evidence because they were stolen, according to the affidavit.

When Shelley inquired further, Hodge told him that former Williamsburg Police Officer Brad Nighbert had taken a lot of them and other officers took the rest. Nighbert is currently awaiting sentencing in federal court for heading up a drug trafficking ring in Whitley County. Hodge admitted taking a nice knife for himself that he said he later gave to a prominent Williamsburg resident, according to the affidavit.

Shelley said that he caught Hodge by surprise one day when Hodge was in the evidence cabinet.

When Hodge realized that Shelley was there, he told Shelley that he needed something because his head was killing him, according to the affidavit.

Shelley also added that he has seen Hodge "high" on drugs while on the job, and Shelley said that he believes Hodge has a pain pill addiction, according to the affidavit.

Although the sheriff’s department was reported burglarized in December 2009, several investigators and Hodge’s own detective at the time, current 911 Director Chuck Davis, believed the break-in had been staged, and that the culprits actually entered the office using a key, according to the affidavit.

After the break-in, officials compiled a list of over 70 guns that were reported missing or were unaccounted for in addition to a list of over 630 pills or tablets, which are believed to be missing, according to the affidavit.

After federal authorities released a list of the missing firearms in local newspapers, a handful of guns turned up that had been confiscated when police raided Benson’s home in 2004.

Benson later told police, Hodge encouraged him to hire attorney Ron Reynolds if he wanted to get off on reduced charges. Reynolds pleaded guilty last week in federal court to taking part in an extortion conspiracy with Hodge where Hodge would get sheriff’s department arrestees lenient plea deals in exchange for Hodge getting a share of Reynolds’ attorney fees.
On Dec. 23, 2009, Shelley went to FBI Task Force Officer Greg Pace to report that Hodge provided him with two firearms seized from Benson in 2004, a Ruger .45/70 caliber rifle and a Ruger 30-06 caliber rifle.

On Dec. 29, Shelley told Tremaine that Hodge told him the firearms had been awarded to him personally and not to the sheriff’s office, according to the affidavit.

Shelley said that Hodge gave him the firearms even though he didn’t want them. Hodge reportedly told Shelley, "Don’t worry. You worry too much, Doc," according to the affidavit.

Shelley put the guns in his car and sought advise from Whitley County Attorney Paul Winchester, who told him that the guns were awarded to the sheriff’s office and not Hodge personally, according to the affidavit.

Winchester advised Shelley against giving the firearms back and putting them in the evidence locker. He advised Shelley to keep the firearms in his custody and not to do anything with them because he might have to account for them some day, according to the affidavit.

Winchester noted that if Shelley placed the firearms back into evidence, then Hodge could say Shelley was the last person to have had custody of the firearms.

Shelley said that Hodge told him that he gave two of the guns from the Benson case to Nighbert.

On the Friday before the reported burglary at the sheriff’s department, Hodge asked Shelley if he could say some of the firearms seized from Benson were stolen in a previous burglary that had occurred in 2004 or 2005 at the sheriff’s department, according to the affidavit.

Shelley told Hodge that he would not lie for him.

Shelley said that Hodge also told him that he gave two guns from the Benson case to attorney Paul Croley.

On Dec. 29, 2009, Hodge told Tremaine that Shelley was preparing a list of the unaccounted for firearms missing since the alleged burglary.

Hodge told Tremaine not to include a firearm seized from Tommy Bird because Hodge recalled this firearm had been released back to Bird, or the Benson firearms because they had "all" been issued to his deputies, and were in official use.
Paul Croley and his brother, Coroner Andy Croley, told investigators that Paul had purchased two Colt .45 caliber handguns from Hodge, which were kept in the family safe at Croley Funeral Home for a while before being transferred to a friend’s residence.

Paul Croley insisted he paid Hodge for the firearms, and that the guns weren’t given to him.

Croley advised that he discussed the matter with attorney Jane Butcher, who is the wife of Chuck Davis, who was a detective at the sheriff’s department at the time.

On Jan. 4, 2010, before meeting with Paul Croley, investigators met with Hodge. He told investigators that he had given the handguns in the Benson case out to deputies, some dignitaries and the coroner, who got a couple of the guns.

"I mean, but I told them just to hang on to them. You know, I didn’t sell them to them or nothing," the affidavit quoted Hodge as saying.

Hodge added that a "couple of lawyers" had some of Benson’s firearms too, specifically Paul Croley. Hodge also told investigators at that point that Nighbert had two of the guns, and that another Williamsburg police officer might have one, but he would have to check.

Hodge said that the knives taken from Benson were divided up between officers at the scene, and that everybody ended up with the knives except for the officers at the sheriff’s department, according to the affidavit.

Tremaine stated in the affidavit that he believes that Hodge changed his story to include the fact that he provided some guns to the Croley family because he had received information that the ATF had learned that Paul Croley was going to be speaking to the ATF concerning the Benson firearms.

In January 2010 after the ATF published a list of missing firearms from the sheriff’s department in local newspapers, Andy Croley contacted ATF to report having another firearm that his brother Paul had purchased from Hodge.
Investigators confirmed that .45 caliber Springfield Armory handgun came from the Benson case.

Bailey Cecil Powers, a maintenance man at the courthouse, changed the locks after the alleged burglary at the sheriff’s department.

Powers said it was the third time that he had replaced the locks on the sheriff’s department.

The first time was after Hodge took office, and the second time was after an alleged burglary that occurred there a few years earlier.

Powers told investigators that about four to five years earlier, he had gone in Hodge’s office when Brad Nighbert was inside and that Hodge had 150 to 200 knives on his desk.

Hodge told Powers that police had busted somebody by the lake and seized the knives. Powers told Hodge that he needed a knife and Hodge gave him a cheap knife, according to the affidavit.

Benson was arrested on the Grove Road, which is near Grove Marina on Laurel Lake.

On April 5, 2010, Tremaine interviewed Hodge again and was told that Brad Nighbert had "screwed up" the search warrant at Benson’s residence, and that he didn’t know how the Benson knives were distributed.

Hodge told investigators that he believed it was legally permissible for him to distribute firearms to people outside of his department as long as he could account for them, according to the affidavit.

Hodge also told investigators that neither he nor his officers took any of the knives in the Benson case, and he specifically denied taking any for himself.