MOUNTAIN CITY — A former Johnson County employee pleaded guilty in Criminal Court on Monday on several charges, including the theft of $41,495.55 in Johnson County funds between Sept. 1, 2010, and Aug. 24, 2011.
Kelly K. Horne, 44, also pleaded guilty to three counts of forgery, three counts of hindering a secured creditor and official misconduct. One count of forgery and one count of hindering a secured creditor were dismissed. Senior Judge Jon Kerry Blackwood accepted the plea and scheduled sentencing for Nov. 9. He also ordered Horne to pay $1,000 in restitution. The defense is seeking judicial diversion.
County Mayor Larry Potter said he was pleased with the guilty pleas. It was his interest in investigating the theft of scrap metal at the Johnson County transfer station that led to the discovery of what he called improprieties in Horne’s handling of county funds.
Potter’s suspicions that things were not adding up in the scrap metal sales led him to call in the Tennessee Bureau of Investigation. That led to a state auditor taking a closer look at the county solid waste funds. The audit uncovered a shortage. The 2011 audit from the Tennessee Comptroller’s Office reported “this cash shortage resulted from an employee of the County Mayor’s Office not remitting solid waste transfer collections ($40,695.55) to the county trustee and not remitting sewer inspection collections ($800) to the State Department of Environment and Conservation. We informed the county mayor of the cash shortage on Aug. 24, 2011 and he immediately suspended the suspected employee.”
The auditor reported that the daily collections from the transfer station were not remitted to the county trustee for long periods, as long as 35 days, allowing the buildup of large sums. The auditor also found the receipts were not always issued in sequential order and there were numerous alterations made to the accounting records.
The four forgery counts stem from the alleged signing of “notice of discharge of lien” forms using the names of four individuals who did not authorize the acts. The grand jury presentments said the forgeries were done “with the intent to defraud or harm” Johnson County Bank and Farmers State Bank.
The four hindering secured creditors charges allege that Horne intended to hinder the enforcement of security agreements by Johnson County Bank and Farmers State Bank involving a 1998 Ford Explorer and a 1997 Chevrolet pickup truck.
Potter said that even though the court ordered Horne to pay $1,000 in restitution, the county’s insurance company has already paid back the money the auditor reported as stolen.