Earlier this month, federal prosecutors served disgraced Democrat State Auditor Troy Kelley with eight new charges—bringing the total indictment count to a whopping 17. The new charges, handed down by a federal grand jury, allege that he “laundered money and evaded the Internal Revenue Service (IRS) while he was in office.”
Kelley, as he did previously, pleaded not guilty to all the new charges last week. And, as they have done previously, Democrat elected officials remained silent about the charges against one of their own.
The federal case against Kelley centers on allegations that he “failed to refund nearly $3 million in escrow client funds and then schemed to hide the money and avoid paying taxes on it.” Kelley, allegedly, did so by laundering $245,000 via a salary that he paid himself from the stolen funds.
New details emerge concerning Kelley’s relationship with Jerue
Kelley’s longtime associate Jason Jerue—whom he hired as a contract worker and paid with taxpayer dollars when he became state auditor—has resurfaced in the new allegations. According to prosecutors, Kelley paid Jerue what could very well be called “hush money”, to the tune of nearly $20,000.
Kelley paid the sum “during a time when Jerue was being sought for questioning by lawyers representing Old Republic Title, which had sued Kelley for failing to refund reconveyance fees to its clients between 2005 and 2008.”
Oddly enough, during that time, Jerue appeared to have dropped off the face of the earth. Court documents reveal that Jerue “could not be located and was never questioned in the lawsuit despite extraordinary efforts to find him.” Kelley’s sketchy monetary relationship with Jerue gets still more complicated post-lawsuit. The Seattle Times,
“Court documents allege that Kelley gave Jerue a $9,980 check in September 2011, shortly after the Old Republic Title lawsuit was settled for nearly $1.2 million.
“Kelley wrote a second check for $9,985 to Jerue’s mother in July 2012. Jerue has told prosecutors that the money was intended for him but was funneled through his mother to hide it from his wife.”
Case against Kelley may encounter roadblock
Kelley isn’t the only party involved in the investigation that is facing heat. The Seattle Times recently reported that the forensic accountant “key to the FBI’s tax-evasion and money-laundering investigation” into Kelley “is being questioned in a criminal investigation and audited by the Internal Revenue Service.”
Federal prosecutors disclosed that detail in a warrant used by agents to “seize $908,000 paid by Kelley to a Seattle law firm as a retainer for his former lawyer.”
It should be noted that documents do not disclose any details into the investigation. The accountant in question has not been formally notified that he is the subject of any investigation. Additionally, the government has confirmed that it “does not anticipate seeking charges” against him.
No doubt, that won’t prevent Kelley’s new attorney from using the incident as an opportunity to cast doubt on the case—if permitted.
Kelley’s new attorney may present a conflict of interest
Speaking of Kelley’s new attorney, Seattle trial lawyer Angelo Calfo, the U.S. Attorney’s Office has asked a U.S. District Judge to conduct an inquiry into whether Calfo has a conflict of interest. The potential problem arises from the fact that Calfo represented Jerue’s mother, Sandy Evans. The government may be call Evans as a witness in its case.
Kelley can certainly rest assured that Calfo is doing everything possible to present his client as innocent, even attempting to redefine what it means the launder money. Calfo recently told the Times, “Money launderers take drug money and put it into restaurants, that’s money laundering.” What federal prosecutors accuse Kelley of doing is also money laundering, but with 17 indictments who’s really counting at this point.
Through all this mess, Kelley has the audacity to formally remain in office. He refuses to resign as state auditor and—as a result—continues to cast a stain on the office.
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