Court document alleges ex-Whitley sheriff stole, took payoffs, falsified records

Affidavit details payoffs, drug use and thefts, stolen funds

bestep@herald-leader.comMarch 22, 2011 

Former Whitley County Sheriff Lawrence Hodge

The former sheriff in Whitley County allegedly took payoffs from drug dealers and bootleggers, stole money from his office and had records falsified to cover financial shortfalls, and he is thought to have taken guns and drugs seized from suspects, according to a sworn statement filed in federal court.

In one instance, drug dealer Bennie King told a federal agent that he paid then-Sheriff Lawrence Hodge $1,000 to $1,500 a month to avoid investigation by the sheriff's office, according to the affidavit.

"King stated that in order to sell pills in Whitley County without fear of being arrested, you had to pay Sheriff Hodge," the document said.

Hodge served two terms as sheriff. He lost a re-election bid in the May primary and left office at the end of last year.

He has been indicted in state court on charges of stealing about $350,000 from his office. The case is pending; Hodge has pleaded not guilty.

He has not been charged in federal court, but the affidavit makes clear he has been under federal investigation for some time.

Todd E. Tremaine, a special agent with the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, swore out the affidavit in November to get a warrant to search Hodge and his office, house and vehicle.

The document, which also cites information gathered by FBI task force officers, became available last week in federal court.

London attorney Gary Crabtree, who represents Hodge, was not available Monday for comment on the allegations.

Witnesses alleged to federal agents that Hodge was involved in a wide range of wrongdoing while he was Whitley County's chief law-enforcement officer.

King, an admitted drug dealer, said that soon after Hodge won election, a deputy suggested King approach Hodge about what it would take to protect his drug operation.

King said that after an initial $1,000 "donation," he began meeting Hodge every three weeks to a month in Sunny Hill Baptist Church's parking lot and paying him, according to the affidavit.

Hodge, who came to the meeting in his white police SUV, eventually started asking for a couple of pain pills in addition to the money, King told Marcus Hopkins, an FBI task-force officer.

In October, a bootlegger named Larry Logan told Tremaine that Hodge came by his operation nine or 10 times while in office and took alcohol without paying for it.

"Logan added that he felt like if they didn't let Sheriff Hodge take what he wanted, then they would get raided," according to the statement.

Logan and another man, Jim Thomas, told ATF agents they sold booze illegally in the dry county for a third man. After he died in July 2006, the two went to see Hodge about continued protection, Thomas said.

"Thomas said Logan met with Sheriff Hodge, and when he returned, he told Thomas that if they paid Sheriff Hodge 10 to 15 pills a week, they could sell whatever they wanted," the affidavit quoted Thomas as saying.

Several witnesses indicated Hodge abused drugs.

For instance, in May, Jimmy Frank Goley told federal authorities he had been selling Hodge four or five 80-milligram OxyContin pills for $400 about every other day for a couple of months, according to Tremaine's affidavit.

Hodge would call Goley and then drive by his house and honk his horn — a signal for Goley to meet him at a nearby church for the drug transaction.

Goley said he gave Hodge more than $2,000 for campaign literature before the May primary in hopes of not getting arrested.

Goley's son, Jimmy David Goley, said that on one occasion when he delivered the pills for his father to Hodge soon before the election, Hodge laughed, "commenting that the pills were better than money for buying votes," according to the affidavit.

Jimmy David Goley also told authorities he paid Hodge 10 Percocet pills in February 2009 to get back a pistol his father's girlfriend had used to try to kill herself.

A former bookkeeper of Hodge said Hodge took money from his office accounts and used it to buy drugs.

The bookkeeper, Vicki Paul, said she and another employee, Kendra McKiddy, sometimes collected the full amount on property-tax bills but recorded that the person had paid a discounted amount, resulting in a surplus.

Hodge would take half the excess, and she and McKiddy split the other half, said Paul, who left the office in 2008, according to the affidavit.

Paul said Hodge had her falsify the books in his office to cover shortfalls in the accounts.

After Hodge's police cruiser burned at his house in spring 2007, he asked Paul if there was anything he should say was in the car, according to the affidavit.

She told him he should say there were tax records in the burned vehicle.

"Paul said they did this in order to create an alibi for the destruction of tax records," according to the document filed in federal court.

Timmy Shelley, who was Hodge's chief deputy, said Hodge often took money from one account that Hodge said he was going to use to pay informants and make drug buys.

Shelley said that seemed odd because he was not aware of any cases the sheriff's office investigated with the use of informants, and it hadn't carried out any drug raids during a period in which Hodge took $70,000 from the account, according to Tremaine's statement.

Hodge took out money several times just before weekends, holidays and his wife's birthday, according to the affidavit.

Hodge's office could not account for numerous guns seized during investigations, and witnesses indicated the possibility that Hodge kept pills seized from suspected drug dealers.

For instance, in 2007, sheriff's deputies arrested Larry Gene "Ike" Lay.

Lay later told Tremaine he had a fake WD-40 can with a false bottom that held 200 to 300 pills and some cocaine.

Ron Reynolds, a Williamsburg lawyer, said Hodge later showed him the can with the pills and cocaine. They each snorted some of the cocaine, and Hodge told Reynolds he had a person who could sell the pills for him, Reynolds told Tremaine.

There were no pills from the case logged as evidence at the sheriff's office, according to the federal affidavit.

"I don't know why," Hodge reportedly said.

Reynolds pleaded guilty last week to conspiring with Hodge to extort money from people, including Lay, who were charged in drug cases.

Hodge would recommend Reynolds to suspects, and Reynolds would kick back part of his fee to Hodge.

In one case, Hodge called Reynolds to tell him about arresting a suspect and noted he had "plenty of money," according to the affidavit.

Reynolds charged the man $150,000 and gave $40,000 of it to Hodge. Hodge told Reynolds he hid the money under a floorboard at his house, Reynolds said.

The people who were charged got their charges reduced with Hodge's consent, according to court records.

Tremaine's affidavit cites a number of potential charges against Hodge, including possession of a gun by a drug user, use of a gun to further a drug crime, illegal possession of guns stolen from the sheriff's office, extortion, money laundering and racketeering.

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