TACOMA — A U.S. appeals court on Wednesday upheld the fraud conviction of former Washington state Auditor Troy Kelley.

Kelley was convicted of several felonies, including possession of stolen property, lying under oath and tax fraud, in connection with a business he ran more than a decade ago, before he was elected state auditor in 2012. He was sentenced in 2018 to a year in prison.

The business, called Post Closing Department, tracked escrow paperwork for title companies. Prosecutors said he pocketed nearly $3 million in fees that he should have returned to clients of the title companies.

One of the companies Kelley worked with, Old Republic Title, sued him for not paying the refunds. Kelley settled the case for $1.1 million after making what prosecutors contend were false statements about his practices under oath.

Among other things, Kelley argued in his appeal that prosecutors never proved he wasn’t entitled to keep the money and that U.S. District Judge Ronald Leighton improperly pressured the jury to reach a verdict.

A three-judge panel of the 9th Circuit Court of Appeals unanimously rejected the appeal.


“We’re reviewing and analyzing the decision and what it did and did not decide,” Kelley’s attorney, Angelo Calfo, said in an email. “We plan to explore the possibility of further appeals to the Ninth Circuit or the U.S. Supreme Court.”

Seattle U.S. Attorney Brian Moran called for Kelley to begin serving his time following a legal odyssey that has included two trials — the first ended with the jury deadlocked on all but one count — and multiple appeals.

“The attorneys in this office have sought nothing but justice for those Kelley defrauded and the members of our community who expect law breakers to be held accountable regardless of their station or standing in society,” Moran said.

Kelley, a Democrat, served as a state representative before being elected auditor in 2012. He rejected calls to resign following his indictment but declined to run for re-election.