A federal judge decided Tuesday to put Morgan County Judge-Executive Timothy Conley on home incarceration.
Conley has been indicted on federal charges of running a scheme to fraudulently steer county construction contracts to a Salyersville company in exchange for kickbacks. He was arrested Monday at his office.
Conley pleaded not guilty in U.S. District Court for the Eastern District of Kentucky in Lexington on Tuesday to four federal counts of mail fraud, one count of theft from a program receiving federal funds, and one count of conspiracy to launder money.
His trial was scheduled for Feb. 4 in Frankfort. The trial is expected to last two weeks.
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Federal prosecutors had asked Magistrate Judge Robert Wier to keep Conley in jail.
Wier chose to release Conley, but he placed a number of restrictions on him.
He ordered that Conley have no contact with any county employees or magistrates.
The sole exception is that one person will be designated as an intermediary to communicate with Conley about county business and to facilitate any acts required of him to keep the county running.
"Whether you remain actively employed ... that's a matter for the state system and the people of Morgan County," Wier said.
Wier said he was "trying to figure out a way for you to complete your duties" as judge-executive, but he later added, "I don't doubt that you're not going to be able to do your entire job under these restrictions."
Conley is confined to his house and the farm it sits on. Except in a medical emergency, he is authorized to leave only for court appearances, to meet with his attorney or to attend medical appointments.
Only family members, his clergy person, his attorney and representatives of the probation office may visit Conley's home.
He is prohibited from having contact with any witnesses in the case or with his co-defendants.
Kenneth Lee Gambill and Ruth Gambill, owners of PBTHNOJJ Construction, also have been indicted in the case.
The indictment says their Salyersville firm received $1.1 million in construction contracts from early 2009 until August. Some of the contracts were for cleaning up debris from the tornado that devastated West Liberty and Morgan County on March 2, 2012.
According to the indictment, Conley took gifts and payments from Kenneth Gambill. In exchange, the county judge "rigged purportedly competitive bidding processes" so that construction contracts went to PBTHNOJJ. The indictment said Conley altered PBTHNOJJ's bids to ensure that they were the lowest.
It also says Conley abused his position and authority by ensuring that PBTHNOJJ received payments in excess of the tornado cleanup work it actually performed.