Washington State Auditor Facing New Charges

     (CN) – A federal grand jury added money laundering and tax evasion to the list of charges Washington state auditor Troy Kelley faces in a scheme prosecutors say continued even after he was elected.
     Kelley was indicted earlier this year on charges of tax fraud, attempted obstruction and possession of stolen property, with prosecutors alleging he stole more than $1 million when he was operating a mortgage services company from 2003 to 2008.
     The attempted obstruction charge was dropped from Thursday’s superseding indictment due to changes in case law, according to a statement from the Justice Department.
     In the original indictment, prosecutors alleged the 51-year-old Democrat – through his business – accepted payments from real estate title companies for document-tracking work.
     The title companies withheld $100-$150 on each loan to pay the fee, with Kelly’s company keeping $15-$20 as a fee. The rest of the money was supposed to be returned to homeowners, but Kelly kept all of the money for himself and hid it from the title companies and the Internal Revenue Service, according to the original indictment.
     Prosecutors now believe Kelley’s scheme continued even after he was elected in 2012, and the superseding indictment covers conduct that allegedly occurred between 2011 and 2015.
     “The superseding indictment alleges that Mr. Kelley’s scheme continued even after his election to statewide office,” said U.S. Attorney Annette L. Hayes. “As set out in the new charges, he is alleged to have laundered money as recently as February of this year.”
     Kelley maintains his innocence and remains in office, although he has taken a leave of absence. Gov. Jay Inslee called for Kelley to resign in April when the original indictment was handed down.
     State leaders have considered launching impeachment proceedings but have taken no action to date.
     Kelley’s trial is expected to begin in January.
     If convicted, he faces up to 10 years in prison on the stolen property charge and 20 years on the money laundering charge. The remaining charges are punishable by three to five years in prison.

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