FRANKFORT — Longtime Owsley County Clerk Sid Gabbard must resign and pay the state more than $61,000 after entering an Alford plea Friday to charges of tax evasion and abusing the public trust.
Gabbard, who was first elected clerk in 1985, will not serve any jail time as a condition of his plea, state officials said Monday. He entered the plea in Franklin Circuit Court to three counts of abuse of public trust and three counts of willfully filing false tax returns or failing to pay taxes.
In an Alford plea, a defendant does not admit guilt but acknowledges there is enough evidence to be found guilty.
Attorney General Jack Conway's office opened an investigation into Gabbard's bookkeeping after a 2010 review by state auditors showed repeated problems. The attorney general's investigation revealed that Gabbard withheld state income tax from employees' checks but didn't forward it to the state.
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"The citizens of Owsley County elected Sid Gabbard to represent them with honesty and integrity," Conway said. "Mr. Gabbard betrayed that public trust. He treated public funds as his own at a time when communities across the commonwealth have struggled to fund vital programs and protect services."
Gabbard must resign after June 14, his sentencing date, but he might step down sooner, said Wade Rasner, Gabbard's attorney.
Gabbard has agreed to pay the state for the back taxes out of his future retirement benefits at a rate of $1,000 a month, Rasner said. If the plea agreement is approved by a judge on June 14, Gabbard will be on probation for eight years.
"He has accepted responsibility for the issues regarding the audits," Rasner said.
State audits have noted financial problems in Gabbard's office for a decade.
Starting in 2002, the office's recordkeeping was so haphazard that auditors could not determine how much money might have been missing from county coffers.
The 2010 audit was the ninth in a row in which Gabbard's accounting was so poor that auditors couldn't express an opinion on the financial condition of the office. It also was the seventh consecutive review that the auditor's office referred to law enforcement.
The audits concluded that Gabbard might have been using money from one year's tax collections to fill in deficits that appeared in the previous year's books.
"When we do the final audit of Gabbard's office, it will become more clear what the deficit is because he will not be able to take money from the next year to fill in gaps," said Stephenie Steitzer, a spokeswoman for state Auditor Adam Edelen. "For the past decade, the auditor's office has had grave concerns about the financial activities of the Owsley County clerk."
The 2010 audit also found a number of other problems in Gabbard's office, including that it collected at least $59,536 which Gabbard and employees didn't put in the bank or didn't record.
Much of that money should have been passed on to local agencies.
Edelen had urged Owsley County officials to demand a full accounting of funds from Gabbard. Owsley County Attorney Henley McIntosh said last summer that Gabbard had paid what was owed to the fiscal court and sheriff's office.