Greg Kelley’s $500,000 Settlement After Wrongful Conviction

Greg Kelley’s settlement with the City of Cedar Park, Texas totaled $500,000, reached on July 19, 2022 to resolve his federal civil rights lawsuit over a wrongful child sexual assault conviction that put him in prison for 1,153 days. The agreement ended claims against the city, former Police Chief Sean Mannix, and former Detective Chris Dailey without a civil trial.¹

The Federal Lawsuit

Kelley filed suit in May 2020 in the U.S. District Court for the Western District of Texas. The case, Kelley v. City of Cedar Park, No. 1:20-cv-00481, named the city along with Mannix and Dailey as defendants.²

Brought under 42 U.S.C. § 1983, the complaint alleged violations of Kelley’s Fourth, Fifth, and Fourteenth Amendment rights. His claims included:

A fraudulent investigation causing his unlawful arrest, detention, prosecution, and incarceration.
Withholding and destroying exculpatory evidence while fabricating inculpatory evidence.
Failing to pursue known exculpatory leads, including alternative suspects.
Conspiring to violate his constitutional rights.
A Monell claim against the city for failure to train and supervise its officers.
A defamation claim against Mannix personally.

Magistrate Judge Susan Hightower handled discovery and the motions to dismiss before the parties settled.² The public record of the $500,000 agreement does not describe any non-monetary terms.¹

What the Investigation Got Wrong

The civil claims rested on findings from a post-conviction inquiry by Texas Ranger Cody Mitchell, which identified misconduct at nearly every stage of the original 2013 probe led by Dailey and supervised by Mannix.¹

Dailey backdated the offense dates in his probable cause affidavit to line up with the period Kelley lived in the home of Johnathan McCarty, a football teammate whose mother ran the in-home daycare where two young boys were assaulted. He also stated falsely in the affidavit that the victim had identified Kelley. When he interviewed the second child, Dailey told the boy that the first had already pointed to Kelley, and he suggested leading questions to the children’s parents. He pushed the case toward indictment over the objection of assistant district attorney Stacey Mathews.¹

Neither Dailey nor Mannix investigated McCarty, who physically resembled Kelley and had the same access to the daycare. Instead, according to the post-conviction findings, the two ran a media campaign treating Kelley as guilty before trial.¹ Kelley was 18 when he was arrested in August 2013; a Williamson County jury convicted him in July 2014 on two counts of aggravated sexual assault and sentenced him to 25 years.³

The Exoneration That Made the Suit Possible

Williamson County District Attorney Shawn Dick, elected in 2016, reviewed the case after taking office in January 2017 and concluded that the prosecution had “blinded” itself and the police investigation was “wholly deficient.” He said he would not have prosecuted Kelley.⁴

New evidence surfaced that year indicating McCarty had confessed to a friend and that images of naked children were found on his computer and phone.⁴ Kelley was released on a $50,000 bond in August 2017. On November 6, 2019, the Texas Court of Criminal Appeals overturned the conviction, writing that “the system failed him, for it convicted an innocent man.”³ Three weeks later, District Judge Donna King issued a formal declaration of innocence, opening the door to state compensation under the Tim Cole Act.⁵

State Compensation on Top of the Settlement

The $500,000 from Cedar Park was not Kelley’s only recovery. The Tim Cole Act provides $80,000 for each year of wrongful imprisonment plus monthly annuity payments to exonerees declared actually innocent. According to a 2025 report, Kelley received about $258,000 as a lump sum with monthly payments of roughly $1,200.⁶

What Happened to the Officers

Mannix retired from the Cedar Park Police Department in early 2020, citing cancer treatment. He was later named a finalist for the police chief position in Burnet, Texas, and withdrew his acceptance before being sworn in after Kelley’s supporters organized protests.⁷

Dailey resigned on July 9, 2020, one day after Cedar Park Mayor Corbin Van Arsdale and City Council Member Mike Guevara filed a criminal complaint with the Williamson County District Attorney’s office accusing him of perjury. The complaint pointed to a 2017 hearing in which Dailey denied speaking with prosecutor Stacey Mathews about a possible second child victim, contradicting Mathews’ testimony that the conversation happened in 2013.⁸ Dick’s office said it would evaluate the perjury complaint and transfer it to another agency for investigation.⁹

McCarty was never charged in the daycare assaults. Dick stated in 2017 that without a confession or extraordinary new evidence, prosecution was not possible. McCarty was later arrested on unrelated drug charges and eventually pleaded guilty to unlawful restraint and drug possession tied to a 2015 incident involving a 15-year-old, receiving a four-year prison sentence.¹⁰¹¹

1
Prison Legal News. $500,000 Settlement for Texas Man Wrongly Imprisoned for Child Sex Abuse
2
GovInfo. Kelley v. City of Cedar Park, 1:20-cv-00481 – Report and Recommendation
3
Austin American-Statesman. Greg Kelley Conviction Overturned by State’s Highest Criminal Court
4
The Appeal. Texas District Attorney Says System Failed in Case of Man Convicted of Sexual Assault
5
Spectrum Local News. Greg Kelley Officially Exonerated by Judge
6
People. How Texas Teen Football Star Rebuilt His Life After Wrongful Conviction
7
Oxygen. What Happened to Sean Mannix, Chris Dailey, Cody Mitchell
8
Austin American-Statesman. Cedar Park Police Investigator Resigns After New Complaint Filed in Greg Kelley Case
9
KVUE. Cedar Park Police Chris Dailey Resigns in Greg Kelley Case
10
Oxygen. Where Is Greg Kelley’s Friend Johnathan McCarty
11
Austin American-Statesman. Alternate Suspect in Greg Kelley Case Sentenced in Unrelated Charges