Feds Plan To Retry Troy Kelley On Deadlocked Counts

May 31, 2016
Originally published on May 31, 2016 3:52 pm

Federal prosecutors say they intend to retry Washington State Auditor Troy Kelley after his first trial ended in April with the jury voting to acquit on one count and deadlocked on 14 others.

Lead prosecutor Andrew Friedman revealed the government’s intentions at a Tuesday morning status conference in the case at the federal courthouse in Tacoma. District Judge Ronald Leighton set a March 13, 2017 trial date.

“After careful review we have decided to seek a new trial for Troy X. Kelley on the charges the jury could not reach a verdict on,” U.S. Attorney Annette Hayes said in a statement. “We believe it is in the interest of justice to seek final judgment on all the counts in the indictment.”

Kelley left the courthouse without making a comment, but his defense attorney Patty Eakes described her client as “extremely disappointed.”

“This case has had a huge, emotional burden on him and on his family, as well as a financial burden and he was hopeful given … the message that the jurors seemed to be sending of ‘this isn’t stolen property’ that they case would be over.”

Kelley was charged with possession of stolen property, money laundering, making false statements and filing false tax returns. The charges stem from his work in the real estate services industry during the pre-recession housing bubble. Prosecutors accuse Kelley of pocketing more than $3 million in homeowner fees that should have been refunded. The defense has characterized the case as a “rotten onion.”

Eakes said that at the end of lengthy deliberations, the jury was split 10 to 2 on count one, possession of stolen money, with the majority wanting to vote to acquit.

“The jurors were very clear that they were never anywhere close to convicting him of that charge,” Eakes said following the status conference.

However, the jury foreman told reporters after the trial that the majority of jurors were inclined to find Kelley guilty on some of the tax-related charges.

Prosecutors did not indicate if they intend to retry Kelley on some or all of the deadlocked counts. At trial, the jury found Kelley not guilty of a single count of lying to IRS agents.

Kelley did not speak during the short hearing other than to confirm that he is willing to waive his right to a speedy trial.

Initially, Leighton set a November trial but Eakes successfully argued for a later date because of conflicts with another case her firm is handling and because by next year Kelley will have left office.

“Once he’s no longer a sitting public official, to some extent we think the interest in the case from a publicity standpoint will die down,” Eakes told reporters. She added that less publicity could make selecting a jury easier.

But before there can be a retrial, Leighton must rule on a pair of defense motions. One asks that he acquit Kelley on most of the remaining charges based on a lack of evidence that he committed a crime. The other motion asks Leighton to find that to retry Kelley on charges of filing false tax returns would constitute double jeopardy.

Eakes told the judge that if he rules against them on that motion, they will immediately appeal to the Ninth Circuit Court of Appeals which could mean a delay of 12 to 18 months in any retrial.

A ruling on these motions could come in late June.

Since his trial, Kelley has returned to work at the State Auditor’s office and continued to ignore calls to step down. He made headlines last month when he requested the resignations of his chief of staff, Doug Cochran, and office spokesman, Adam Wilson. When Governor Jay Inslee demanded an explanation for those personnel changes, Kelley went on the attack and accused Inslee, a fellow Democrat, of “political grandstanding” and mismanagement of his own cabinet agencies.

Kelley’s term ends next January and he has not filed to run for re-election.

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