Even if former Washington state auditor Troy Kelley was never a crook, federal prosecutors are again treating him like he is one.
New emails dating to 2003 — unearthed since Kelley’s 2016 trial ended in a deadlock on numerous federal charges — are being used to justify the time and effort of a retrial.
Prosecutors originally charged Kelley, a Pierce County Democrat, with ”possessing stolen money, laundering money, lying under oath and filing false income-tax returns,” as a recent Associated Press story recounted.
Specifically Kelley kept close to $3 million of fees collected by his Post Closing Department business as part of tracking real estate closings for title companies during the real estate heyday of the 2000s. His role as auditor was not implicated, and Kelley always claimed he was innocent.
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The older emails were not available for the first trial when jurors deadlocked on 11 charges — including tax evasion, theft, and money laundering. The jury acquitted Kelley of lying to the Internal Revenue Service. At that point we were ready to see this saga end.
Prosecutors in the U.S. Attorney’s Office now need to lay out their new evidence from the 500 emails they say have been recovered so far from old computer tapes at Fidelity National Title. If what they say is true — that emails dating to when Kelley first did work for Fidelity show he was meant to return unused money — they better prove it.
Though Kelley’s lawyer Angelo Calfo describes the retrial as disappointing, we’d say the same about Kelley. His actions as a businessman were disappointing — even if his lawyer can argue that the industry he was in did not always refund unused fees.
A successful conviction might help clean up another arm of the real estate industry that proved itself dirty in the 2000s.
As we’ve noted before, prosecutors in the first trial said Kelley promised to collect $100 to $150 for each real estate transaction his firm tracked; it would keep $15 or $20 for itself, use some of the funds for fees such as recording of transactions, and refund the remaining money to home owners.
Yet Kelley retained money from tens of thousands of cases in which additional fees were not required. In a few cases where title companies asked questions or homeowners demanded refunds, Kelley did refunds.
Kelley’s lawyers pointed out at trial that Old Republic Title, which had sued Kelley, gave homeowners only a fraction of the $1 million it won from Kelley. Prosecutors countered that Old Republic had nearly $1 million in legal fees and yet still was able to pay home buyers some funds.
We give Kelley some benefit of the doubt, but that does not mean his conduct was excusable. The legal chips now must fall where they may.