Jury finds state auditor not guilty of lying to IRS

A jury has acquitted Washington State Auditor Troy Kelley of a single charge in a theft and money-laundering case.

The prosecution could not convince a 12-member jury that Kelley lied to the Internal Revenue Service, according to The Tacoma News Tribune.

There are 14 other felony charges, including theft, tax evasion and money laundering, that the jury hasn’t reached a verdict on. They reported being deadlocked earlier in the day.

Kelley is the first Washington state official indicted in 35 years. He is accused of illegally pocketing $3 million in fees that prosecutors say he should have refunded to homeowners when he ran a real-estate services business. They say it happened during the height of the housing boom, before Kelley was elected state auditor.

“My office will thoroughly review the counts that the jury deadlocked on before making a decision about our next steps in this case,” said Seattle U.S. Attorney Annette Hayes.

“The jury has made its decision, but the public trust has been violated. The elected office of state auditor has been sullied by Mr. Kelley’s trial. He should do the right thing and resign and give the electorate and the state auditor’s office a chance to heal and move forward.” — Republican Senate Majority Leader Mark Schoesler, R-Ritzville.

“The people of Washington deserve the chance to elect a new auditor, untainted by allegations of fraud and obstruction. Troy’s selfishness has made the office a running joke on both sides of the aisle in Olympia, so our next State Auditor needs to be effective on day 1.” — Rep. Drew Stokesbary, a Republican from Auburn who had co-sponsored an impeachment resolution that the Legislature never took action on.

The Associated Press contributed to this report.

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