LAS VEGAS -- Nevada Lt. Gov. Brian Krolicki has been indicted on felony misappropriation charges by a grand jury. The indictment handed up Tuesday names Krolicki and his former chief of staff in the treasurer's office, Kathryn Besser.

Krolicki was charged with two counts of misappropriation and falsification of accounts by a public officer, and two counts of misappropriation by a treasurer. The four counts are all felonies, and each carries a possible sentence of up to four years in prison.

Besser faces two counts, including being a principal to misappropriation and falsification of accounts and being a principal to misappropriation by a treasurer.

Krolicki, a Republican who may run against U.S. Senate Majority Leader Harry Reid, D-Nev., in 2010, said he's "wholly innocent" and was targeted for political reasons by Democratic Attorney General Catherine Cortez Masto -- and that Reid was involved in the process.

Masto said she couldn't comment on a notice sent by her office to Krolicki confirming the move for an indictment. Krolicki said the notice cited a law making it a felony for any misappropriation or falsification of government accounts by a public officer.

A 2007 audit said budget controls were bypassed in the $3.7 billion Nevada College Savings Program. Krolicki has disputed the audit's findings.