In August 2016 a grand jury, convened in Pulaski County under the direction of special prosecutor Nelson Chipman of Marshall County, indicted Gayer and his former chief deputy Ron Patrick on charges stemming from an almost year-long state audit at the Pulaski County Sheriff's Office that was completed in November 2015. As the audit proceeded, an investigation by Indiana State Police was launched in August 2015 into alleged misdeeds regarding missing firearms, ammunition and other irregularities at the sheriff's office. Chipman, a Marshall County prosecuting attorney, was appointed special prosecutor to review the case. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) was also involved in the investigation.

The audit results were publicly released in February 2016 by the Indiana State Board of Accounts indicating a discrepancy of over $20,000 regarding the purchase/inventory of firearms and ammunition. The purchases were made over a four-year period from January 2011 through the end of 2014, during Gayer's second term as sheriff.

The audit was initiated by current sheriff Jeff Richwine after he found alleged questionable purchases from the sheriff department's commissary fund shortly after taking office in January 2015. The discrepancies in the county's firearms/ammunition inventory were discovered during the audit.

At Gayer's trial this week, the jury returned its not guility verdict in under three hours, following three days of testimony. Gayer was represented by Bryan Cook, and the state's case was presented by special prosecutor Chipman.

Deputy Patrick pleaded guilty to an obstruction of justice charge last year and had 10 other charges dropped. He was sentenced to 18 months in prison, but the sentence was suspended, and Patrick was placed on probation.

Gayer retired as an Indiana State Police trooper, after serving for 27 years, before his election as sheriff in 2006.