Federal indictment reveals new details into Democrat Troy Kelley’s alleged criminal activities

In yet another example of Democrat corruption in Washington State, a federal grand jury yesterday indicted Democrat State Auditor Troy Kelley on 10 counts of criminal activity on charges ranging from tax fraud to possession of stolen property. After fiercely defending Kelley the previous day, Jay Inslee finally joined the Washington State Republican Party and various news outlets—including the Seattle Times—in calling for Kelley’s immediate resignation.

The most serious charges Kelley faces include one count of possession and concealment of stolen property, a crime punishable by up to 10 years in prison, and one count of attempted obstruction of civil litigation, which carries a sentence of up to 20 years. Kelley also faces multiple counts of making false declarations and statements while under oath, charges punishable by up to 5 years in prison. All other charges are punishable by 3-year sentences.

The federal grand jury indictment has revealed a series of shocking—and frankly disturbing—new details surrounding the scandal. Here are four you should know about:

1. The federal investigation has been going on for several years, which means Kelley knew of it prior to running for the office of State Auditor in 2012.
2. As recently as 2011 and 2012, Kelley allegedly “paid himself $245,000 a year through a shell company, then illegally wrote off more than $60,000 each of those years for tax purposes for personal and campaign expenses.”
3. Between 2003 and 2008, Kelley allegedly “stole up to $2 million by not refunding money due its customers” via his former company, Post Closing Department. In order to cover-up his theft, Kelly also allegedly “directed employees to create fake spreadsheets to show that fees were being properly tracked and occasionally issued refunds when someone complained” and “to create a defense in the event that he subsequently was questioned” about his company’s dealings.
4. During the 2012 elections, Kelley’s Republican opponent, James Watkins, demanded an explanation concerning a lawsuit, brought in federal court, that “alleged Kelley, his wife and others at Post Closing had stolen nearly $1.2 million from its customers.” The case ended in May 2011 with a confidential settlement. Kelley “downplayed the lawsuit as an overblown business dispute” while running for office and “repeatedly refused to divulge the amount of the settlement. The indictment revealed Kelley paid the plaintiff, Old Republic, $1.15 million. However, Kelley allegedly went on to keep about $2,581,653 of the funds he had concealed from the IRS.

Kelley continues to deny any wrongdoing. He entered a not-guilty plea and accused federal investigators of conducting a “witch-hunt.” An attorney by trade, Kelley ironically claimed he never “thought” he was breaking the law to a room full of reporters following his appearance before a U.S. magistrate judge yesterday. Despite the clear stain he has placed on his office, Kelley has thus far refused to resign. Instead, he announced he would take a taxpayer-funded leave of absence beginning May 1^st. His trial is scheduled to begin June 8^th.

Photo via the Seattle Times.