Troy Kelley case gets underway in Tacoma courtroom

The trial of State Auditor Troy Kelley opened Monday and could last four weeks or longer as prosecutors try to prove Kelley stole and hid $1.4 million in real-estate fees.

Kelley has pleaded not guilty and says his former business earned the fees.

Jury selection will continue Tuesday after taking up the first day of the trial in Tacoma’s federal courthouse.

U.S. District Judge Ronald Leighton, prosecutors and defense attorneys quizzed potential jurors about what they’ve read, seen and heard about the case. Most of them professed little or no knowledge of the case.

Leighton dismissed four potential jurors who seemed to have formed opinions based on news coverage, including one who said: “I think if you’re trying to hide something, you did something wrong.”

The judge dismissed a dozen people for hardships that included multiple sclerosis and work responsibilities.

The roughly 55 people remaining were to be culled further Tuesday. Prosecutors and defense attorneys can reject a limited number from the pool after taking turns asking questions.

Leighton asked potential jurors about their interactions with law enforcement, the Internal Revenue Service and other government agencies, and about their previous experiences as victims of crime or as jurors.

The judge scrutinized their views on lawsuits, politicians, elected office holders, Democrats, title companies and the mortgage industry.

Kelley is a Tacoma Democrat in his first term as the state’s elected auditor, which pays just more than $120,000.

His business did work on behalf of title companies doing escrow services. Prosecutors say he promised title companies Old Republic and Fidelity that if they sent him mortgage fees of $100 to $150 from home closings, he would take a $15 or $20 cut and refund the rest to homeowners.

In the majority of cases, prosecutors said, he didn’t issue refunds. They contend he sought to hide the money from the IRS and a group of homeowners who sought their money back in ultimately unsuccessful lawsuits against title companies.

Kelley faces 16 felony counts, including money laundering and tax fraud.

His defense says investigators put on blinders while pursuing an elected official and ignored evidence of innocence. His attorneys say prosecutors can’t prove title companies or homeowners had a right to the money in question.

This story was originally published March 14, 2016 at 11:25 AM with the headline "Troy Kelley case gets underway in Tacoma courtroom."