Washington State Auditor

This story has been updated.

The outcome of the real estate services fraud case against Washington State Auditor Troy Kelley could hinge on the testimony of Jason JeRue who served as operations manager for Kelley’s former company, the Post Closing Department.

In the spring of 2008, when future Washington State Auditor Troy Kelley was in the process of closing down his real estate services business, he instructed his operations manager to falsify client spreadsheets and “get rid” of records. That was the testimony Thursday from Jason JeRue, a highly anticipated witness in Kelley’s money laundering and tax evasion trial.

Washington State Auditor Troy Kelley’s trial enters its fourth week Monday. As prosecutors continue to mount their case, a behind-the-scenes fight has emerged over Kelley’s payment of taxes to the state of Washington and whether that’s relevant to this federal case.

Jurors in the trial of Washington State Auditor Troy Kelley heard from Jason Jerue, a witness who is testifying under a grant of immunity from the federal government. He took the stand Wednesday afternoon in federal court in Tacoma.

Washington State Auditor Troy Kelley is on trial for pocketing real estate closing fees that prosecutors say should have been refunded to homeowners. But emails introduced into evidence Thursday call into question whether his company was the only real estate services firm that failed to issue consumer refunds during the housing bubble of the 2000s.

A former manager for Fidelity National Title escrow offices in western Washington testified Wednesday that State Auditor Troy Kelley promised to track real estate reconveyances for a $15 flat fee and refund leftover funds to customers.

WASHINGTON STATE AUDITOR'S OFFICE / FACEBOOK

A defense attorney for Washington State Auditor Troy Kelley moved for a mistrial moments after a federal prosecutor had concluded his opening statement in the money laundering and tax evasion trial against Kelley.

The judge in the case, Ronald Leighton, denied the motion. But it provided a dramatic courtroom moment at the outset to a trial that's expected to last more than four weeks and marks the first time since the early 1980s that a top elected official in Washington has been at the center of a federal criminal indictment.

Opening arguments are expected Tuesday afternoon in the money laundering and tax evasion trial of Washington State Auditor Troy Kelley. But first a jury of 12 plus two alternates must be empaneled.

The U.S. Department of Justice has notified around 13,000 homeowners in connection with the real estate services fraud case against Washington State Auditor Troy Kelley. The notifications went to former customers of two title companies that contracted with Kelley before he was elected state auditor.

The Washington Legislature has no plans to impeach indicted State Auditor Troy Kelley. And now it’s clear he also won’t be recalled from office.

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