Prosecutor: Troy Kelley trial a 'plain case of fraud and a cover-up'

TACOMA, Wash. -- A federal prosecutor says the case of indicted Washington State Auditor Troy Kelley is a "plain case of fraud and a cover-up."

Assistant U.S. Attorney Katheryn Kim Frierson delivered the government's closing argument Wednesday following a fraud trial that lasted more than five weeks.

Kelley stands accused of illegally pocketing $3 million in fees prosecutors say he should have refunded to homeowners when he ran a real-estate services business last decade, before he was elected state auditor.

Frierson told jurors that Kelley concocted an elaborate cover-up to hide his actions, including instructing a former employee to doctor documents and destroy evidence, moving money among various accounts, and lying in civil litigation as well as on his taxes. She said Kelley "did the things only those who know they are guilty do."

Kelley's attorneys say the case is just a contract dispute, not a criminal matter, and that no one was harmed because the homeowners were not entitled to get their money back.

The most serious charge against Kelley is money laundering, which carries a maximum of up to 20 years in prison. Kelley would be expected to face much less prison time than that if he's convicted.

Kelley, a Democrat, has refused to resign, but his lawyers say he won't seek re-election.