Ex-mayor Sallie Peake arrested.

WELLFORD, S.C. --

A former Upstate mayor and police chief were arrested Tuesday. Sallie Peake, 79, and James "Chris" Guy, 38, have been charged with misconduct in office following a SLED investigation.

Both served the town of Wellford earlier this year. Peake was the Mayor and Guy was the Chief of Police.

Arrest warrants show Peake allegedly misused town funds to pay for renovations of property that wasn't owned by the municipality. The same documents allege the former mayor hired undocumented workers to make those renovations.

Guy is accused of unlawfully exceeding his authority by misusing town funds and using town property to operate a business for personal gain.

Both bonded out of the Spartanburg County Detention Center Tuesday on a $10,000 bond.

Peake was involved in controversy while in office when money from the illegal sale of a military surplus tractor by the Wellford City Council went to fund an empty museum on Main Street according to documents. Peake led the project that used almost all of the $60,000 from the sale.

Tommy Watson, who defeated Peake in the race for mayor earlier this year, told 7 On Your Side in June the sale of the tractor was only part of the SLED investigation into, what he called, "financial irregularities at city hall."

Guy resigned from his post as chief of police in August because of what Watson calls "differences philosophies and management style.

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