- Associated Press - Wednesday, April 20, 2016

TACOMA, Wash. (AP) - The Latest on the federal fraud trial of Washington State Auditor Troy Kelley (all times local):

4:30 p.m.

After more than five weeks, the federal fraud case against Washington State Auditor Troy Kelley has gone to the jury.

The prosecutors and defense lawyers wrapped their closing arguments Wednesday afternoon. Two of the 14 jurors were then dismissed as alternates, and the remaining 12 will begin their deliberations Thursday.

Kelley stands accused of illegally pocketing $3 million in fees prosecutors say he should have refunded to homeowners when he ran a real-estate services business last decade, before he was elected state auditor.

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2:15 p.m.

An attorney for Washington State Auditor Troy Kelley calls the government’s case against him “a disaster.”

Kelley stands accused of illegally pocketing $3 million in fees prosecutors say he should have refunded to homeowners when he ran a real-estate services business last decade, before he was elected state auditor.

Defense attorney Angelo Calfo began his closing argument in the five-week federal fraud trial in Tacoma by shaking the hands of his client and his client’s wife. Then he told jurors that the prosecution’s case was based on a false premise: that Kelley was dealing with money that belonged to other people. Calfo argued that the title companies Kelley worked with never took the position that homeowners were entitled to the refunds.

He said prosecutors started out intent on winning a conviction and ignored evidence of Kelley’s innocence.

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10:35 a.m.

A federal prosecutor says the case of indicted Washington State Auditor Troy Kelley is a “plain case of fraud and a cover-up.”

Assistant U.S. Attorney Katheryn Kim Frierson delivered the government’s closing argument Wednesday following a fraud trial that lasted more than five weeks.

Kelley stands accused of illegally pocketing $3 million in fees prosecutors say he should have refunded to homeowners when he ran a real-estate services business last decade, before he was elected state auditor.

Frierson told jurors that Kelley concocted an elaborate cover-up to hide his actions, including instructing a former employee to doctor documents and destroy evidence, moving money among various accounts, and lying in civil litigation as well as on his taxes. She said Kelley “did the things only those who know they are guilty do.”

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9:52 a.m.

Closing arguments are set to begin in the federal fraud trial of Washington State Auditor Troy Kelley.

Kelley stands accused of illegally pocketing $3 million in fees prosecutors say he should have refunded to homeowners when he ran a real-estate services business last decade.

His trial has lasted more than five weeks and featured testimony from his former employee, Jason Jerue, who told jurors that Kelley ordered him to falsify documents to hide that he wasn’t paying the refunds.

Kelley’s attorneys say the case is just a contract dispute, not a criminal matter, and that no one was harmed because the homeowners were not entitled to get their money back.

The most serious charge against Kelley is money laundering, which carries a maximum of up to 20 years in prison. Kelley would be expected to face much less prison time than that if he’s convicted.

Kelley, a Democrat, has refused to resign, but his lawyers say he won’t seek re-election.


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