INDIANAPOLIS -- An Indianapolis code enforcement inspector accused in an alleged scheme in which abandoned vehicles were diverted to tow lots, crushed and shredded pleaded not guilty on Monday.

Chad Frye, 38, was arrested last week on charges of theft, official misconduct and corrupt business practices.

Investigators said Frye, who was hired in April 2009, admitted to illegally towing and disposing of 10 vehicles, 6News' Jack Rinehart reported.

"He was using his position of trust with the city, his position of power, to misuse and make $20 to $50 per car," said Marion County Prosecutor's Office spokesman Mario Massillamany.

After pleading not guilty to all of the charges during a brief court appearance, Frye declined to comment.

"At the proper time, Mr. Frye will make a full explanation of the allegations," said his attorney, Robert Alden.

Indianapolis police Lt. Jeff Duhamell said that when Frye was asked to check on an abandoned vehicle complaint, he would tell authorities the vehicle wasn't there and would call a friend and have the vehicle towed to Two Little Bees Auto Parts, at 505 South Tibbs Ave.

Police said the plot unraveled when Penny Archie contacted the city on Nov. 11 about having her daughter's vehicle towed from the driveway of her west side home.

The auto parts business stripped cars and had them crushed, police said, before they went on to Omnisource to be shredded.

Frye was arrested after police set up a sting and watched a vehicle being towed to Two Little Bees and followed it to Omnisource.

Investigators said Frye was cooperating in their investigation. His trial is set for March 2010.