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Judge Orders Seized $900K Returned To Kelley

Washington State Auditor's Office
Washington State Auditor Troy Kelley.

A federal judge in Tacoma Thursday ordered the feds to return to indicted Washington State Auditor Troy Kelley $900,000 it seized in September. The feds maintained that money was “tainted.”

U.S. Attorney spokeswoman Emily Langlie said U.S. District Court Judge Ronald Leighton stopped short of deciding there was no probable cause to believe Kelley fraudulently retained the funds. 

"The judge made no findings," Langlie said, "on whether or not the government had proved its case."

Without that probable cause, the central charge and foundation of the case--that Kelley possessed and sought to conceal $1.4 million in homeowner fees that he should have refunded--would be called into question.

“We are pleased that the judge has determined that the money should stay frozen and in a blocked account," Langlie said.

In addition to possession of stolen funds and money laundering, Kelley is also charged with making false statements and filing false tax returns. He has pleaded not guilty to all charges.

Since January 2004, Austin Jenkins has been the Olympia-based political reporter for the Northwest News Network. In that position, Austin covers Northwest politics and public policy, as well as the Washington State Legislature. You can also see Austin on television as host of TVW's (the C–SPAN of Washington State) Emmy-nominated public affairs program "Inside Olympia."