Kenny Hughbanks, the one-time sheriff of Scott County and former Clark County Sheriff’s Office employee and consultant was charged last week with a level 6 felony for tax evasion. On Tuesday, he pleaded not guilty.
Investigators say he filed false tax returns for the years 2019, 2020 and 2021. Records show he failed to report nearly $146,000 in taxable income — from miscellaneous sales and money police say Hughbanks used that belonged to a family member with dementia.
He was arrested last Thursday and released the same day after posting a $5,000 bond. He appeared for an initial hearing Tuesday in Scott County where Judge Jason Mount entered the plea on his behalf.
Hughbanks’ name showed up early in public records released in the more than yearlong investigation of former Clark County Sheriff Jamey Noel. That investigation has included more than 60 search warrants and led to charges for Noel, his wife and daughter and two former Clark County council members.
Noel is currently serving time in prison after pleading guilty last year to more than two dozen felonies. His daughter, Kasey, is also in custody after admitting guilt earlier this year, and former Clark County Council member Brittney Ferree is serving a sentence on probation after pleading guilty this year to a level 6 felony for conflict of interest.
Criminal cases are ongoing for Noel’s estranged wife, Misty, and former Clark County Council member John Miller.
Hughbanks’ Scott County charge comes after investigators started digging into his finances as part of the Noel investigation.
“I don't think that Kenneth Hughbanks is on anyone's radar had it not been for the Jamey Noel investigation brought to the Indiana State Police and then ultimately brought to me,” special prosecutor Ric Hertel said after the hearing.
Defense attorney Patrick Renn did not comment to news media following the hearing, saying he had another engagement.
Records show in 2018, Hughbanks took a family medical leave of absence as sheriff to care for his godmother with dementia.
In May 2019, Hughbanks’ wife, Lyndi Hughbanks, notarized a document stating that his godmother gave Hughbanks power of attorney over her bank accounts.
Records show the two used nearly $124,000 from the woman’s accounts between 2019 and 2021, and that the money was used “for the benefit” of Hughbanks and his wife. They say this was not reported as income on their tax filings. The records do not show what the money was used for, but say the woman “was not in a position to provide authorization for these funds to be taken,” due to her dementia.
Police say Hughbanks also sold more than $20,000 in miscellaneous items — like tools, bikes and household items — and didn’t report the sales as income. Records also show Hughbanks was “required to collect and remit the sales tax on those sales” to the state of Indiana, and that he failed to register as a retail merchant.
Hughbanks told police in an interview last year he had made between $30,000 and $40,000 from miscellaneous sales over the previous several years, but investigators were only able to account for around $20,000.
Investigators said Hughbanks also profited $1,600 from the resale of a “small train,” and didn’t report this as income.
Hughbanks served less than a year as sheriff of Scott County in 2018. He was appointed to finish the term for Sheriff Dan McClain, who was appointed as a U.S. Marshal. Hughbanks did not run for reelection.
Court records show police reviewed Clark County jail commissary funds and found that between 2015 and 2022, when Noel was sheriff, Hughbanks or his various business entities were paid more than $280,000.
The information is outlined in an Indiana State Board of Accounts report filed in February 2024. Hughbanks and Noel are defendants in a civil suit filed by the state of Indiana to recover those funds. Noel and his family are also named in a separate suit.
Prosecutor Hertel said, after Tuesday’s hearing, there did not appear to be probable cause showing Hughbanks committed a crime related to the jail commissary funds.
“He was on the payroll by Jamey Noel and it appears that he paid taxes for those,” Hertel said.
Hughbanks’ wife has not been charged. Hertel said he’s focusing on the existing cases.
Hughbanks told police last year his wife “was not aware that the filing of their income tax returns was not proper.”
He said the extensive investigation that started with Noel is largely finished, unless something else comes to light.
“In fairness, we think it's over, but I think we've thought that before that it's been over and a rock gets turned over, and then there's something else to be looked at underneath that,” he said.
Hughbanks was also previously the Scott County Republican Party chair.
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