State Auditor Troy Kelley’s criminal-defense team hinted at its strategy Friday in a pretrial hearing.
The federal investigation of Kelley was “biased,” defense attorney Angelo Calfo told federal District Judge Ronald Leighton in a preview of Kelley’s trial. which starts March 14.
“This case started as a political attack” by Kelley’s opponent in his 2012 bid for auditor, Calfo said, “and once the FBI got it, it became a high-profile political corruption case.”
He said authorities put on “blinders,” ignoring evidence of innocence.
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Prosecutors allege Kelley duped title companies into business arrangements between 2006 and 2008 that gave his document-tracking company control of fees of $100 to $150 that the companies had charged at the closing of home sales.
Federal authorities have identified and notified about 13,000 homeowners potentially affected.
Court filings in the case show a major question at the trial will be about who the victims are: two title companies, thousands of homeowners or no one.
Prosecutors describe in the briefs “a relatively-straightforward case in which (Kelley) is charged with lying to escrow companies to obtain money.”
They say Kelley made promises to refund all but $15 to $20 of the fees to homeowners in most cases, but instead kept the full fees, then covered his tracks after homeowners started going to court to try to get their money back.
He’s charged with tax fraud and money laundering, among other counts.
Calfo says civil lawsuits over the fees show title companies denied ownership of the money, which he called “a barnburner of a fact” for the jury to hear.
He said in briefs that “property can only be ‘stolen’ from an owner.”
Prosecutors say they don’t have to prove whose money it was, only that it didn’t belong to Kelley. It’s enough that the title companies were holding onto the money, they contend.
The court has sent out questionnaires to potential jurors, and the judge said 75 to 100 of them likely will face questions March 14 in picking a jury.
Attorneys sparred in briefs and in court Friday about what evidence and witnesses should be excluded from trial.
Leighton didn’t rule immediately on those questions.
He indicated he’s inclined to allow evidence from the civil cases to be presented but still is “wrestling” with whether to allow Calfo to call an expert witness to explain the cases to the jury.
Leighton said he’s likely to let Calfo question FBI forensic accountant Gary Beisheim about the pressure the accountant said in e-mails he was under to finish the investigation – even though prosecutors now don’t plan to call Beisheim to the stand.
Prosecutors switched him out for another accountant after revealing Beisheim is in legal troubles of his own. If he’s not a witness for the prosecution, the judge might keep defense attorneys from grilling him on those legal problems.
Leighton said his decisions about what’s allowed will be subject to change during trial: “In the words of Donald Trump, flexible.”