FILE - In this April 26, 2016 file photo, Washington State Auditor Troy Kelley leaves the federal courthouse in Tacoma, Wash. Kelley, whose federal fraud trial last year ended with an acquittal on one count and a deadlocked jury on more than a dozen others, will be in a courtroom once again this week as prosecutors try him a second time. And this time, newly recovered emails dating to 2003 could shed light on whether he was entitled to pocket the roughly $3 million the government says he stole when he ran a real-estate services business during the height of last decade's housing boom. (AP Photo/Ted S. Warren, File)

SEATTLE - Former Washington state Auditor Troy Kelley, whose federal fraud trial last year ended with an acquittal on one count and a deadlocked jury on more than a dozen others, will be in a courtroom once again as prosecutors try him a second time.

And this time, newly recovered emails dating to 2003 could shed further light on whether he was entitled to pocket the roughly $3 million the government says he stole when he ran a real-estate escrow services business during the height of last decade's housing boom.

Kelley, a Democratic state lawmaker from Tacoma who was elected auditor in 2012, was charged in 2015 with possessing stolen money, laundering money, lying under oath and filing false income-tax returns. He maintains he did nothing wrong.

"It is super disappointing that prosecutors are bringing this case to trial again," his lawyer, Angelo Calfo, said in an email. Calfo said the jury in the first trial leaned "overwhelmingly" toward acquitting Kelley of the key charge of possessing stolen property, though prosecutors say the jury also voted toward convicting him on other counts.

The first Washington state official indicted in 35 years, Kelley took a seven-month leave of absence after he was charged. He returned to office after the trial, defying bipartisan calls for his resignation, but he decided not to seek re-election as auditor. The position, which is tasked with rooting out waste and fraud in state government, is now held by Democrat Pat McCarthy.

The charges stemmed from Kelley's operation of a business called Post Closing Department, which tracked escrow paperwork for title companies.

Prosecutors said that to obtain business from the title companies - and access vast sums of money from homeowners - Kelley promised that Post Closing Department would collect $100 to $150 for each transaction it tracked; keep $15 or $20 for itself; use some of the money to pay county recording and other fees if necessary; and refund the customer any remaining money.

In tens of thousands of cases, the additional fees were not needed, but Kelley retained the money anyway, prosecutors said. He refunded the balance only in a vanishingly few instances when title companies began asking uncomfortable questions or when homeowners were savvy enough to demand it, prosecutors said.

Kelley insists he was entitled to keep the money. During his first trial, his attorneys and government lawyers sparred over emails dating to 2006 between Kelley and Fidelity National Title, which insisted he was supposed to refund any unused money.

Before the first trial, Fidelity told the government it no longer had earlier emails - going back to 2003, when Kelley began working with Fidelity - that might prove Kelley was supposed to refund the money. But a Fidelity employee testified that it was possible to recover those emails.

Last month, Fidelity finally began turning them over after pulling them off magnetic, archival tapes. Fidelity has provided about 500 emails so far, and up to thousands more are expected. Kelley's lawyers unsuccessfully asked the judge to bar the company from turning them over so soon before trial, given that the parties first requested them long ago.

Among the newly discovered emails, assistant U.S. attorneys wrote in their trial brief, are some from 2003 in which Kelley promised his company "will not be charging additional fees beyond the single $15 tracking fee."

It's unclear if other newly discovered emails amended that promise, but Calfo noted: "Other documents provided by Fidelity show that the title company purposefully structured escrow closings in a way that authorized Troy to take the entire fee paid by the customers, and authorized Troy to take additional fees."

Prosecutors also say Kelley took elaborate steps to hide that he was keeping the money - something he wouldn't do if he was entitled to it.

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. Old Republic refunded only a small portion of that money to homeowners, however. It kept the rest.

Jury selection is due to begin Monday in federal court in Tacoma, with opening statements planned for Tuesday. The trial is expected to be shorter than the first one, which lasted five weeks.

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News from © The Associated Press, 2017