Troy X. Kelley, Tax Fraud, Washington 2018

Troy X. Kelley, former Washington State Auditor, was convicted yesterday of nine criminal counts for fraud relating to a business he operated prior to his statewide elective office.

Kelley was found guilty of possession of stolen property, making false declarations in a court proceeding, and tax fraud. The charges stem from a business Kelley operated between 2003 and 2008, where he was paid by real estate title companies to track documents related to real estate sales and refinancing. Kelley had agreements with those companies to charge a flat $15 or $20 for each of the title documents his employees tracked on county websites.

However, between 2005 and 2008, Kelley kept the entire amount withheld on each loan, resulting in nearly $3 million in stolen money. When the fees became the subject of class action litigation in 2008, Kelley moved the stolen money through various bank accounts to hide it. Kelley was convicted of six counts of tax fraud, two counts of making false declarations, and one count of possession of stolen property. The jury found him not guilty on five counts of money laundering.

US Attorney Annette L. Hayes commended the investigators and trial team that worked diligently to present a complex case, and the jury who carefully reviewed all the evidence before returning this verdict. Kelley is scheduled for sentencing on March 30, 2018.

Possession and concealment of stolen property is punishable by up to ten years in prison. False declarations and false statements are punishable by up to 5 years in prison. The remaining charges are punishable by up to three years in prison. The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI) and the FBI.

The case is being prosecuted by Assistant United States Attorneys Arlen Storm, Andrew Friedman, Seth Wilkinson, and Katheryn Frierson. Appellate attorney Michael Morgan provided significant assistance.

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