OLYMPIA — When federal agents raided State Auditor Troy Kelley’s Tacoma home in March, a trove of paper records that would come to guide their investigation sat in the family laundry room, in a box stored atop the washing machine.
In the box, labeled “Kelley 21426” and seized while the auditor was away in California, were paper records of Kelley’s private-business career handling real-estate transactions: bank statements, lists of properties, tax returns and some ledgers, according to search warrants unsealed late Thursday. Also taken by the federal agents were two computers and a handful of data-storage devices.
Investigators found the volume of paper records “mysterious,” IRS special agent Aaron Hopper wrote in an affidavit. Kelley had sworn in a 2010 deposition, during a lawsuit over his business conduct, that a fire in 2008 destroyed many of his private business records and damaged the laptop he kept them on. The discovery of the paper files, including 204 pages of spreadsheets of individual properties that seemed linked to Kelley’s 2004-2007 reconveyance business, led authorities to get a second warrant for a deeper search of Kelley’s computers.
Within weeks, their findings were used to draw up the 10 felony counts now Kelley now faces, which include possession of stolen property, tax evasion and obstructing investigators.
“The existence of thousands of lines of detailed individual deeds of trust recording numbers and corresponding reconveyance recording data is inconsistent with Kelley’s prior statements under oath that his business records, with the exception of tax returns, business cards and ‘few other things’ had been destroyed in a fire,” Hopper wrote.
Kelley has pleaded not guilty and is free on bond with a June trial date. He is to go on unpaid leave from his state job Monday. A call Friday to his attorney, Mark N. Bartlett, was not returned.
The warrants say that also in Kelley’s house, they found two letters that “neatly corroborate” things Kelley told IRS agents when he was questioned in April 2013 about his business dealings. Other things taken from his house include six thumb drives, an Apple desktop computer and an ASUS notebook computer.
Public records released this week in response to a request about Kelley’s workplace computer use indicate he was an infrequent user of the internet and email on his state government-issued machine.
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