A grand jury has indicted three town officials in a small southern Indiana community on welfare fraud and misconduct charges for allegedly conspiring to defraud Indiana of unemployment benefits.

The town of Palmyra's clerk-treasurer and two council members were indicted Thursday along with the Harrison County town's former town manager and a council member's husband. All five face charges of felony conspiracy to commit welfare fraud and official misconduct.

The charges stem from an alleged scheme in which town council member Virginia Kirkham moonlighted by cleaning the town hall and a senior center in Palmyra.

County Prosecutor Otto Schalk tells The Courier-Journal of Louisville, Kentucky the others allegedly agreed to make payments in the name of Kirkham's husband so that she could continue collecting unemployment benefits.