Richard Essex/Eyewitness News
Greenfield - Hancock County Sheriff C.K. "Bud" Gray was arrested Friday afternoon on several charges.
Gray was arrested at the Indiana Live Casino in Shelby County Friday afternoon on a charge of obstruction of justice. The arrest came after a warrant was issued, accusing the sheriff of mishandling government money and intimidating possible witnesses.
"There were witnesses called in an attempt to not get them to speak with us during the investigations, threats made of physical harm," Greenfield Police Chief John Jester said.
Hancock County Prosecutor Dean Dobbins says the charges stem from allegations Gray funneled more than $3,000 in department funds for his personal use.
Even though Gray was arrested at a casino, Greenfield Police - who are heading up the criminal aspects of the investigation - say nothing leads them to believe he was gambling with the missing money.
He was transported to the Hamilton County Jail Friday evening for protective reasons. No bail has been set and he will have a hearing Monday in Hancock County.
"The reason there is no bond, the state actually requested, as a condition of a bond, that there be a mental health evaluation," said Dobbins. "The court felt, because of the scope of the evidence, that he should not release Mr. Gray for his own safety as well as others."
County officials say Gray will be held in a medical unit by himself and under 24-hour video surveillance. Dobbins says when Gray was being questioned by detectives, he made threatening remarks toward a detective and indicated he might take his own life.
Neither the Hancock County prosecutor nor any of the officers involved with the investigation are saying much, other than it hurts to arrest a fellow officer and friend.
"It has been horrible. I mean, we have all worked with him," Chief Jester said.
The arrest came after a probable cause hearing which involved misappropriation of funds. Eyewitness News has learned Gray is also facing charges of theft and official misconduct.
Gray was arrested by Hancock County's coroner, who by state statute is the only local official who can arrest a sitting sheriff.
"It is a black eye in the community, it is going to be a black eye for the law enforcement, it is going to be a huge black eye for the Hancock County Sheriff's Department," said Chief Jester.
Gray was defeated in the May primary election, so he was not up for re-election in November. He was elected sheriff in 2006 and has been with the department for 34 years.
Dobbins says a special prosecutor from northern Indiana will handle the case. Police say Gray is cooperating with the investigation, but there are concerns about his over all well-being.
"Anytime something of this nature happens, there's concern for the folk's state of mind and we just want to take every precaution and make sure he's not going to do anything to harm himself," said Major Mark Bowen, Hamilton County Sheriff's Department.
(The Associated Press contributed to this story.)
