Politics & Government

Appellate court says feds can retry former state Auditor Troy Kelley

Troy Kelley walks out of the Federal Courthouse in downtown Tacoma last April.
Troy Kelley walks out of the Federal Courthouse in downtown Tacoma last April. phaley@thenewstribune.com

A panel of judges on the 9th Circuit Court of Appeals has rejected an appeal by former state Auditor Troy Kelley and says federal prosecutors can retry him on several tax-related felony charges stemming from his defunct real estate reconveyance business.

The three judges unanimously rejected Kelley’s claim that retrying him on the tax charges would constitute double-jeopardy, or trying Kelley twice for the same crime.

The appeal stemmed from the sole verdict the jury was able to reach in Kelley’s theft, money-laundering, fraud and tax-evasion trial last spring in Tacoma. The jury deadlocked on every count but one following a six-week trial.

On the sole count it could agree on, the jury acquitted Kelley of lying to the Internal Revenue Service.

The defense argued that the jury must have believed Kelley in that instance, and that as a result five other tax-related allegations facing Kelley were not viable and should be dismissed. The appeals court, in a single paragraph ruling, disagreed and returned the case to U.S. District Judge Ronald Leighton for trial.

The government has vowed to retry Kelley on the 14 remaining charges alleging he stole upward of $3 million from customers of his real-estate reconveyance fee company by failing to refund money they were owed.

Kelley, a former Democratic state legislator, was elected auditor in 2012 even as an investigation into his business, Post Closing Company, was ramping up.

Even before the verdict, Kelley had said he would not seek re-election. His term expires in January.