Daily Independent (Ashland, KY)

Local News

December 29, 2013

Arraignment set for Morgan County judge’s co-defendants

Contracting firm owners accused in bid-rigging, bribery and kickback scheme

LEXINGTON — The owners of a Magoffin County bridge contracting firm accused of engaging in a bid-rigging, bribery and kickback scheme along with the judge-executive of Morgan County are scheduled to be arraigned Monday in federal court.

Kenneth Lee and Ruth L. Gambill of Salyersville, owners of PBTHNOJJ Construction, are slated to make their initial court appearances in Lexington before Magistrate Judge Robert E. Wier.

They will be represented by separate attorneys. Mark A. Wolhlander of Lexington, a former assistant U.S. Attorney, entered a notice of appearance last week for Kenneth Gambill; James Lowry IV of Lexington for Ruth Gambill.

Kenneth Gambill and Morgan Judge-Executive Tim Conley were charged with four counts of mail fraud and one count each of theft from a program receiving federal funds and conspiracy to money-laundering in an indictment returned earlier this month by a federal grand jury sitting in Frankfort. Ruth Gambill was charged with conspiracy to money-laundering.

Conley was arrested Dec. 9. He was arraigned the following day and pleaded not guilty to the charges. Wier allowed him to remain free on his own recognizance.

The indictment came roughly four months after FBI agents conducted searches of Conley’s home and office. The FBI confirmed at the time that it was conducting an investigation involving Conley, but would not say what it involved.

According to the 13-page indictment, from early 2009 until Aug. 20 of this year, Conley steered bids for small bridges and culverts in Morgan County to the Gambills’ company in exchange for “gifts, payments and other things of value.”

Conley identified potential projects for the construction firm and sought and obtained funding for those projects through the Kentucky Transportation Cabinet, the indictment states. He then allegedly “rigged purportedly competitive bidding processes” to ensure PBTHNOJJ Construction would be awarded the contracts for those projects.

Among the methods Conley allegedly used to subvert the bidding process was to open bids for projects outside of public view and then alter PBTHNOJJ Construction’s bid prices to “ensure the appearance” that the Gambills’ company had submitted the lowest bids, the indictment states.

Conley would secure the approval of the Morgan Fiscal Court for his selections “under the fraudulent pretense that PBTHNOJJ Construction submitted the lowest bids in the course of fair and competitive bidding processes,” according to the indictment.

PBTHNOJJ Construction obtained about $1.1 million in proceeds from contracts it secured with Morgan County through the scheme, the indictment states. Kenneth Gambill allegedly provided kickbacks to Conley, including cash payments derived from the proceeds of those contracts.

Conley and Kenneth Gambill are charged with mail fraud for allegedly using the U.S. Postal Service in furtherance of the bid-rigging scheme.

Conley and the Gambills also are accused of misusing federal aid dollars that flowed into Morgan County following the March 2, 2012 tornado that devastated the city of West Liberty and other locations in the county.

Following the tornado, the county contracted with PBTHNOJJ Construction for debris removal, and, according to the indictment, Conley misused his position and authority to ensure the firm was overpaid for the work.

The mail fraud and money-laundering charges carry a maximum penalty of 20 years in prison, while the program fraud count carries a 10-year sentence. However, any sentences the defendant might receive following conviction would be imposed following the consideration of federal sentencing guidelines. There is also a maximum fine of $250,000 for each count.

A grand jury indictment is a formal accusation of a crime and does not establish guilt.

KENNETH HART can be reached at khart@dailyindependent.com or (606) 326-2654.

1
Text Only
Local News
  • Boyd Democrats take floor at Elks

    Boyd County Democrats met at the Elks Lodge for a matchup between candidates for two of the hottest primary races in Boyd County: sheriff and judge-executive.
    The candidates, sponsored by the Boyd County Democratic Women’s Club, each took to the podium to face the crowd Tuesday night and discuss the candidacy and platforms for the race that is still over a month away.

    April 15, 2014

  • Shay receives 38 years for fatal shooting

    Casey R. Shay, 27, of Morehead, was sentenced Monday to 38 years in prison for the fatal shooting last year of Cassandra M. “Cassie” Owens, 21.

    April 15, 2014

  • 0416homegarden.jpg Space not problem with home garden

    Growing your own dinner is not a concept lost on Kenny Imel.

    April 15, 2014 1 Photo

  • Greenup court jumpstarts road repairs

    As part of the Greenup County Fiscal Court’s annual expenses, the court approved the first reading of an ordinance that allots up to $1.5 million for blacktopping damaged county roads.

    April 15, 2014

  • Nursing home reports drug theft to APD

    Woodland Oaks Health Care Facility, 1820 Oakview Road, on Monday reported the theft of 30 hydrocodone tablets from a secured area within the nursing home.

    April 15, 2014

  • Devices left from previous construction discovered

    All four lanes of U.S. 23 were shut down for nearly two hours Tuesday following the discovery of old explosives on a hillside rock cut.
    The devices apparently were left over from a previous construction project and were discovered by a crew working on the new Ironton-Russell Bridge, Russell Police Chief Tim Wilson said.

    April 15, 2014

  • Boyd walk to raise awareness of autism

    The differences in the nine children in Carla Malone’s classroom are striking.
    A few can talk, but some won’t make a sound and others jabber apparent nonsense sounds.
    There are playful children and those who keep to themselves. Some of the children can read and do other academic tasks. Schoolwork for others means matching pictures and doing exercises to develop fine motor skills, like learning to hold a pencil.

    April 15, 2014

  • Grimes outpaces McConnell in first quarter

    Democratic U.S. Senate candidate Alison Lundergan Grimes has again outpaced her likely Republican general election opponent, incumbent Mitch McConnell, in fundraising during the first quarter — but she remains well behind McConnell in total fundraising and cash on hand.

    April 15, 2014

  • 0416explosives0166 copy.jpg UPDATE: U.S. 23 reopened; explosives eliminated

    More information on the U.S. 23 closure from the the Kentucky Department of Highways.

    April 15, 2014 1 Photo

  • BREAKING: Explosives find shuts down U.S. 23

    All four lanes of U.S. 23 have been shut down to the discovery of undetonated explosives on a hillside, authorities said.

    April 15, 2014

Featured Ads
Seasonal Content
AP Video
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
AP basketball
SEC Zone