Former Washington state Auditor Troy Kelley has been found guilty of several charges related to when he ran a real-estate escrow services business during the height of last decade’s housing boom.
Kelley was convicted Wednesday of possession of stolen property, two counts of making false declarations in a court preceding, and six counts of tax fraud. He was found not guilty on five counts of money laundering. The judge handed down the verdict in Tacoma after a 21-day trial, with sentencing scheduled for March.
It was the second trial for Kelley, a Democratic state lawmaker who was elected auditor in 2012. He was charged in 2015 with possessing stolen money, laundering money, lying under oath, and filing false income-tax returns. His first federal fraud trial last year ended with an acquittal on one count and a deadlocked jury on more than a dozen others.
The charges stemmed from Kelley’s operation of a business called Post Closing Department, which tracked escrow paperwork for title companies. Prosecutors said that to obtain business from the title companies – and access vast sums of money from homeowners – Kelley promised that Post Closing Department would collect money for each transaction it tracked; keep some for itself; use some of the money to pay county recording and other fees if necessary; and refund the customer any remaining money. Prosecutors say that in tens of thousands of cases, the additional fees were not needed, but Kelley retained the money anyway. (AP)
