Kelley begins serving one year in jail

by Peter Jakey, Managing Editor

With no apologies to members of St. Ignatius Catholic Church, or her longtime employer, the Diocese of Gaylord, Kristie Kelley was sentenced to a year in the county jail and ordered to repay $274,831. After a two-week delay, Kelley was back in court Monday for a restitution hearing and sentencing. After some brief testimony from Rogers City Police Department (RCPD) investigator Ken Bielas, Kelley admitted to stealing $274,831 from 2005 to last summer. During sentencing, Circuit Judge Scott Pavlich said it?s difficult to calculate the actual number of victims.

?The church is the community, it?s the members of the church, it?s everyone that goes there, it?s all the charities the church supports,? said Pavlich. ?The victims go out there a long ways. It touches so many lives.? PAVLICH TOLD Kelley, that even though there had been a plea agreement, he believed the amount taken was a compelling reason for him to send her to prison, and that she was close to going until Kelley decided to forgo her pension. According to Presque Isle County prosecutor Rick Steiger, Kelley only agreed to forfeit the pension in the judge?s chambers before Monday?s proceedings.

?I?m willing to send you to jail, so I can take steps to make sure all the pension money goes back to the church,? said Pavlich. Addressing Kelley, he said, ?I just wanted you to know how close you are to going to prison.? She was placed on probation for five years, plus there is a term of probation that orders her to not leave the county. Another term of probation orders her not to gamble. According to records obtained from several northern Michigan casinos, the RCPD reported she lost $80,483.75 in casinos, the police report states. In 2009, she lost $34,947.48 at five casinos, the most in one year. Information was obtained from player and tracking cards Kelley was using.

ORIGINALLY THE investigation was launched because there were large cash deposits going into Kelley?s account at Calcite Credit Union that were flagged by ?the feds.? According to financial records, Bielas was able to establish that Kelley deposited more than a quarter of a million dollars into her own account from Jan. 1, 2005 to June 10, 2010, which didn?t include her paychecks of approximately $1,800 net per month. During the restitution hearing, Bielas testified the figure was established on cash deposits alone, but ?could be very far above.?

Steiger said, ?everything that has happened in this matter, we discussed with the church prior to agreeing to them, and they understood the figure that we had. There was an internal audit, a forensic audit that was completed after there was an agreement. That audit takes into account projections. This is the money that came in during the months (Kelley) has been gone.? That figure came in at $421,000, according to probation officer Jude Bluemle, who prepared the pre-sentencing report. On Aug. 27, 2010, Kelley was questioned at City Hall by Bielas and chief Matt Quaine, the police report states. They wanted to know where she obtained this large amount of cash.

?She stated that she goes to the casinos and wins large amounts of money every time she goes, she wins big,? the report stated. AFT

ER A TIME, she admitted to taking some money, but not $275,000. ?We asked her if the amount was $20,000. She stated that it was, and then she changed that amount herself to at least $50,000.? Kelley said she would think more about the amount taken and call back the next day. Instead, she hired an attorney, who advised her to not to speak to officers further. The matter was then turned over to the prosecutor. The report states that if a memorial check or donation check would come in, Kelley would wait until there was cash for that amount and she would take the cash and then deposit the check so it would balance.

Steiger said, after an extensive investigation, ?(Kelley) does not have any money left over from her stealing from the church. We believe Ms. Kelley has an extensive gambling issue, that unfortunately, the bulk of the money that was stolen was gambled away. All five (casinos) we received information from, showed a loss,? A sixth casino didn?t send information. Kelley could have received up to 20 years in prison; however, ?it allows the judge to keep it local and supervise her for five years and make sure she keeps making payments to the church and the community.? Pavlich said she might have to pay more if she gets a job, or she may have to give up some of her Social Security money. Even though, Kelley will be handing over her pension money, she will still be paying $183 per month to receive discounted medical and dental incentive through the church. Kelley already submitted a check of $30,000, reducing restitution to $244,831. Her attorney, Troy Clarke, declined comment. Kelley turned in a plea of ?no contest.? Her first full day in the county jail was Tuesday, her 56th birthday.

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