A telephone wiretap supplied evidence for the federal case against the owners of a Magoffin County construction firm accused in a bid-rigging and kickback scheme with the judge-executive of Morgan County, a defense attorney said Monday.
Mark Wohlander, a former assistant U.S. attorney who is the defense attorney for Kenneth Gambill, said he doesn't know whether Gambill's telephone or Morgan County Judge-Executive Tim Conley's telephone was wiretapped. But Wohlander said after an arraignment Monday that federal authorities have told him that the charges resulted from a 60-day wiretap.
No affidavits or discovery information have been filed in the case to indicate how the government obtained evidence in the case.
Wohlander entered a not guilty plea Monday on behalf of Gambill, 72, of Salyersville. Gambill's wife, Ruth, 56, also of Salyersville, had her not guilty plea entered by Wohlander's daughter, Caitlin. Court records show that Ruth Gambill's defense attorney will be Jim Lowry of Lexington, but he apparently couldn't be in court Monday.
The indictment accuses Morgan Judge-Executive Tim Conley of steering contracts worth $1.1 million to a company owned by the Gambills in exchange for "gifts, payments and other things of value." The indictment was returned earlier this month by a federal grand jury in Frankfort.
Kenneth Gambill and Conley are charged with mail fraud, theft from a program receiving federal funds and conspiracy to launder money. Ruth Gambill is charged with conspiracy to launder money.
Conley, 49, was arrested Dec. 9. He was arraigned Dec. 10 and pleaded not guilty. He is free on his own recognizance.
A two-week trial in Frankfort is scheduled to start Feb. 4, but Wohlander said the trial date is likely to be pushed back.
The Gambills were never incarcerated since the indictment was unsealed on Dec. 9, but Magistrate Judge Robert Wier placed a number of restrictions on the couple. The Gambills are prohibited from traveling outside the jurisdiction of the U.S. District Court's Eastern Kentucky division, which splits the state in half from Covington to the Tennessee state line.
The Gambills must attend court hearings in person, must not change addresses and must report to a federal probation office. They are to continue their employment with their construction company. They are not to use alcohol and, as of Jan. 1, are not to have custody or control of any firearms.
They are prohibited from having any contact with Conley or with any witnesses in the case. Wier also instructed the Gambills not to talk about the case with each other.
If they violate these terms, the Gambills could face incarceration until the trial, Wier said.
According to the indictment, Conley identified potential projects for the Gambills' construction firm — known as PBTHNOJJ or Praise Be the Holy Name of Jesus and Jehovah Inc. — and obtained funding for those projects through the Kentucky Transportation Cabinet. Conley then rigged the bidding by secretly opening other bids and altering the Gambills' bid to make it the lowest, the indictment states.
Conley and the Gambills also are accused of misusing federal aid money after the March 2, 2012, tornado that devastated the city of West Liberty and other parts of Morgan County.
According to the indictment, the county contracted with the Gambills for debris removal, and Conley misused his position to ensure that the firm was overpaid for the work.
The indictment says the bid-rigging and kickback scheme ran from early 2009 until last August.