Politics & Government

To new charges, Washington auditor Troy Kelley repeats his plea: Not guilty

Embattled state Auditor Troy Kelley still faces federal criminal charges tied to alleged financial crimes, and he’s still pleading not guilty.

Kelley, on an unpaid leave of absence from office since May, appeared in court Friday for arraignment on new and revised charges filed by federal prosecutors.

He faces 17 felony counts, including five charges of money laundering, an offense that carries a potential 20-year prison sentence.

Additional charges include tax evasion and possessing stolen property.

As he did after the original charges were filed in April, Kelley entered a plea of not guilty.

Following that formality in one courtroom, federal prosecutors, Kelley and his attorney moved to another courtroom for a status conference.

U.S. District Court Judge Ronald Leighton agreed to a continuance and a new trial date of March 16.

Leighton also said he would address underlying motions filed by both sides in the complicated case.

“This matter was previously scheduled for status conference to see if there was anything to discuss,” Leighton said. “About a week and a half ago, we were told there was nothing. But a gentle prairie zephyr blew up and there have been a lot of developments.”

Leighton was referring to the new charges filed Sept. 2, along with other fresh circumstances.

Federal prosecutors have seized $908,000 given to Kelley’s attorneys as a retainer, alleging the money is part of the illegal proceeds of Kelley’s business.

Prosecutors also contend Angelo Calfo, the attorney now representing Kelley, has a conflict of interest due to his prior representation of one of Kelley’s associates.

In court Friday, Calfo challenged the conflict of interest allegation, and said he wanted an evidentiary hearing to address the seizure of the $908,000.

Leighton said he would address those matters in the coming days and left the courtroom.

The charges against Kelley, a 50-year-old Democrat elected in 2012, stem from a real-estate reconveyance business he ran in the 2000s, and fees paid by mortgage borrowers.

Federal prosecutors say the money was stolen; Kelley says it wasn’t.

Kelley did not speak to reporters after the hearing.

Calfo, his attorney, repeated his client’s claim of innocence, and suggested the government was pursuing the case because Kelley, as an elected official, is “a high-profile target.”