Former WA auditor reports to jail for tax fraud conviction

OLYMPIA, Wash. — Washington’s former state auditor has reported to prison months after he exhausted his appeals on his 2017 tax fraud conviction.

KING 5 reported last week that Troy Kelley is at FCI Herlong, which is a medium-security federal prison in Herlong, California, about 50 miles northwest of Reno, Nevada. Kelley was sentenced to 366 days in prison, followed by a year of supervised release.

The case against Kelley stemmed from his work in the real estate services industry before his election as state auditor in 2012.

Kelley, who previously served as a state lawmaker, was accused of keeping millions in fees that should have been refunded to escrow company customers. Later, prosecutors said, Kelley tried to hide the money by moving it through wire transfers while also creating an off-shore trust in Belize.

Kelley’s first trial in 2016 ended with the jury deadlocked on all but one count, on which he was acquitted. Federal prosecutors tried him again in 2017 and won convictions for several of the charges, but he was acquitted of money laundering.

Kelley and his attorneys appealed to the 9th U.S. Circuit Court of Appeals and, eventually, to the U.S. Supreme Court. In March, the high court denied a petition for review of his case.