Case Document 1 Filed 09/02/15 Page 1 of 26 A0 108 (Rev. 06/09) Application for a Warrant to Seize Property Subject to Forfeiture UNITED STATES DISTRICT COURT for the Western District of Washington In the Matter of the Seizure of (Brie?y describe the property to be seized) The sum of $908,397.51 in United States funds contained in Bank of America trust account No. ?3414 me315-129ea/ APPLICATION FOR A WARRANT TO SEIZE PROPERTY SUBJECT TO FORFEITURE I, a federal law enforcement of?cer or attorney for the government, request a seizure warrant and state under penalty of perjury that have reason to believe that the following property in the District of Washington is subject to forfeiture to the United States of America under 981 (describe the property): USC- The sum of $908,397.51 in United States funds contained in Bank of America trust account No. ?3414, that was transferred from Vanguard Prime Money Market Fund Account held in the name of Blackstone lnternationai, lnc., via Check No. 1007 dated March 26, 2015. The application is based on these facts: )3 Bath r2 ea Ea ES 935 gr?? I $913; 0 Please see the attached Af?davit of Special Agent Michael Brown in Support of Civil Seizure WarrantContlnued on the attached sheet._ 133% ?3 Applicant ?5 signature Special Agent Michael Brown, FBI Printed name and title Sworn to before me and signed in my presence. mamh?m City and state: Seattle, WA Judge ?3 Signature US MAGISTRATE JUDGE BRIAN A. TSUCHIDA Printed name and title 00 *4 0.1.Case Document 1 Filed 09/02/15 Page 2 of 26 AFFIDAVIT STATE OF WASHINGTON SS COUNTY or KING I I, Michael Brown, a Special Agent with the Federal Bureau of Investigation, having been duly sworn, state as follows: I. INTRODUCTION AND AGENT BACKGROUND 1. I have been employed as a Special Agent of the FBI for 7 V2 years, and am currently assigned to the Seattle Division?s Tacoma Resident Agency. While employed by the FBI, I have investigated federal criminal violations related to white collar crime and violent crime. I have gained experience through training at the FBI Academy, other law enforcement training, and everyday work related to conducting these types of investigations. As a federal agent, I am authorized to investigate violations of laws of the United States and to execute warrants issued under the authority of the United States. PURPOSE OF AFFIDAVIT AND PROPERTY TO BE SEIZED 2. I make this Af?davit in support of an application for the seizure of the following as subject to forfeiture pursuant to Title 18, United States Code, Section a. The sum of $908,397 .51 in United States funds contained in Bank of America trust account No. _3414, that was transferred from Vanguard Prime Money Market Fund Account held in the name of Blackstone International, Inc., via Check No. 1007 dated March 26,2015. 3. The facts set forth in this Af?davitare based on my own personal knowledge; knowledge obtained from other individuals during my participation in this investigation, including other law enforcement of?cers; review of documents and records related to this investigation; communications with others who have personal knowledge UNITED STATES ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTLE, WASHINGTON 9810} (206) 5534970 Seizure Warrant Af?davit? 1 USAO No: 2012R01085 Case Document 1 Filed 09/02/15 Page 3 of 26 of the events and circumstances described herein; and information gained through my training and experience. 7 4. Based on my experience and the information contained in this Af?davit, I have probable cause to believe that the above-listed asset constitutes property involved in transactions or attempted transactions in violation of 18 U.S.C. 1956(a)(1)(B)(i) (Money Laundering) 0r property traceable to such property. As such, the above-listed funds are subject to seizure and forfeiture pursuant to 18 U.S.C. SUMMARY OF INVESTIGATION 5. From approXimately 2002 through 2008, Troy X. Kelley owned and operated a business, Post Closing Department (PCD), that tracked the recording of reconveyance documents in residential real estate transactions, on behalf of escrow companies. Speci?cally, Post Closing Department would receive and administer the full amount of reconveyance fees collected by the escrow companies from borroWers and (1) track the ?ling of reconveyances; (2) pay any necessary reconveyance-processing fees, trustee fees and county recording fees; and (3) refund the unused portions of the recenveyance fees back to the borrowers. 6. PCD performed reconveyance tracking services for Old Republic Title (?Old Republic?) for a ?at fee of $20 per reconveyance, and for Fidelity National Title (?Fidelity?) for a flat fee Vof$15 per reconveyance. The escrow companies generally collected a reconveyance fee from each homeowner of between 100 and 150 to cover costs of preparing necessary reconveyance paperwork and county recording fees, as well as the reconveyance tracking fee for ensuring that the reconveyance was properly recorded. in county land title records. Old. Republic and Fidelity paid the full amount of these reconveyance fees over to PCD, Kelley?s company. However, by the relevant time period, industry practices had changed so that the lenders themselves usually performed the tasks of preparing the reconveyance documents and then recording them. 7. Fidelity and Old Republic entrusted Troy X. Kelley and Post Closing Department with millions of dollars of reconveyance fees. Under its contracts with Old STATES ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTLE, WASHINGTON 9810] (206) 553-7970 Seizure Warrant Af?davit- 2 USAO No: 2012R01085 USAO No: 20121101085 Case Document 1 Filed 09/02/15 Page 4 of 26 Republic and Fidelity, PCD was'entitled to the $15 - $20 fee for performing the reconveyance tracking service. PCD Was also permitted to pay trustee fees for drafting the reconveyance documents and county recording fees, which it did in a very small number of the tens of thousands of reconveyances it handled for Old Republic and Fidelity. 8. After taking out its tracking fees of $15 or $20, PCD was obligated to refund the remaining portion of the reconveyance fees to the homeowners. However,-Kelley paid such refunds in only a few cases. Contrary to his representations to Fidelity and Old Republic, Troy X. Kelley did not actually refund unused portions of reconveyance fees to borrowers. Instead, Kelley fraudulently retained, stole, and converted them to his own use. 9. In 2008, lawsuits were ?led in Washington State on behalf of escrow customers alleging, among other things, that escrow companies knowingly and fraudulently charged unnecessary reconveyance fees. The escrow companies, in turn, revealed that in some cases they had out-sourced the monitoring of reconveyances and turned over the administration of reconveyance fees to third-party service providers such as Kelley?s business. One escrow company explicitly accused Kelley of failing to make good on promises to return to the escrow'customers the unused portions of their fees. 1.0. In June, 2008, in the wake of these lawsuits, Kelley ceased operating his reconveyance tracking business in Washington State, and consolidated more than $3 million from the multiple accounts for the business that he maintained at Columbia Bank into one account. This included the unused reconveyance fees that Kelley had kept, which should have been refunded to the real estate owners, funds that Kelley converted by transferring them to an out?of?state Nevada State Bank account Kelley held in the name of Blackstone International, Inc., another company owned and controlled by Kelly. 11. Assuming that the unlawfully retained funds are the last to be deposited and the first to be withdrawn, FBI forensic accountant analysis determined that at least $1,618,744 of the $3,784,619 in funds transferred out of Washington State into the UNITED STATES ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTLE, WASHINGTON 98101 (206) 553?7970 Seizure Warrant Affidavit- 3 Case Document 1 Filed 09/02/15 Page 5 of 26 Blackstone Account at Nevada State Bank on June 18, 2008, represented funds Kelley had failed to refund to borrowers, or to pay third party trustees or counties. 12. property and Troy X. Kelley knowingly possessed and concealed stolen property, with a As such, those $1,618,744 in United States funds represented stolen value of $5,000 or more, and that had crossed a State boundary after being stolen, unlawfully converted, and taken. 13. During that same time-frame Kelley set up an account at Vanguard in the name of Berkeley United, LLC, a company Kelley established in 2008, of which Blackstone owned 1% and the other 99% was owned by Wellington Trust, a trust domiciled in Belize. I 14. On or about June 27, 2009, Kelley transferred via wire a total of $3,634,673 from the Blackstone account at Nevada State Bank to Berkeley?s Vanguard account no. Of the funds included in this transaction, using the most conservative accounting principles, and taking into account further withdrawals, approximately $1,463,171 were tainted proceeds of wire fraud and of converted, non-refunded reconveyance fees that were wired to Berkeley?s Vanguard account, comingled with purported legitimate funds. 15. In doing so, Troy X. Kelley conducted a ?nancial transaction knowing that it involved, in whole or in part, proceeds of his concealment and possession of stolen property, and did so with the intent of concealing the source, nature, location, ownership, and source of those same funds. IV. LEGAL BASIS FOR SEIZURE AND FORFEITURE A. Money Laundering 16. A predicate for Money Laundering is a ?nancial transaction conducted knowing that the property involved represents the proceeds of some form of unlawful activity and that said transaction is knowingly designed in whole or in part to conceal or disguise the nature, location, source, ownership, or control of the proceeds of a specified unlawful activity. See 18 U.S.C. UNITED STATES 700 STEWART STREET, SUITE 5220 SEATTLE, WASHINGTON 98101 (206)553-7970 Seizure Warrant Af?davit- 4 USAO No: 2012R01085 p?n 0?Case Document 1 Filed 09/02/15 Page 6 of 26 17. Possession and Concealment of Stolen Funds, a violation of 18 U.S.C. 2315, wherein ?whoever (or) any goods, wares, or merchandise, securities or money of the value of $5,000 or more. ..which have crossed a State. . .boundary after being stolen, unlawfully converted, or taken, knowing the same to have been stolen, unlawfully converted, or taken. . .shall be ?ned under this title. . .or imprisoned. . is a speci?ed unlawful activity. See 18 U.S.C. 1956(c)(7)(A) and 18. Wire Fraud, a violation of 18 U.S.C. 1343, wherein ?whoever, having devised or intending to devise any scheme or arti?ce to defraud, or for obtaining money or property by means of false or fraudulent pretenses, repreSentations, or promises, transmits. or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or arti?ce. . .shall be ?ned under this title. . .or imprisoned. . is a speci?ed unlawful activity. See See 18 U.S.C. 1956(c)(7)(A) and I 19. Once proceeds become tainted, they cannot become untainted by being commi?ngled with legitimate funds. United States v. Ward, 197 F.3d 1076, 1083 (11?n Cir. 1999). As such, a ?nancial transaction does not have to be comprised entirely of proceeds of a speci?ed unlawful activity to constitute a money laundering offense; it need only involve, in part, criminal proceeds. United States v. Huber, 404 F.3d 1047, 1058 (8th Cir. 2005); US. v. Ward, 197 F.3d at 1083 is no requirement that a ?substantial portion? of the funds be derived from a speci?ed unlawful activity?); United States v. Garcia, 37 F.3d1359, 1365 (9th Cir. 1994) (?it is sufficient to prove that the funds in question came from an account in which tainted. proceeds were comingled with other funds?) B. Forfeiture 20. Pursuant to 18 U.S.C. 981(a)(l)(A) Any property, real or personal, involved in a transaction or attempted transaction in violation of section 1956. . .of this UNITED STATES ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTLE, WASHINGTON 98101 (206) 553-7970 Seizure Warrant Af?davit- 5 USAO No: 20121101085 Case Document 1 Filed 09/02/15 Page 7 of 26 title, or traceable to such property,? is subject to forfeiture. The term ?involved in?should be read broadly to include not just the proceeds being laundered, but also any property used to facilitate the money laundering. United States v. Baker, 227 F.3d 955, 967?970 (7th Cir. 2000). V. INVESTIGATION A. Background. 1. Troy X. Kelley and Relevant entities 21. M.B.A., and is an attorney licensed to practice law in the States of California, New York, Troy X. Kelley, a resident of Tacoma, Washington, holds a .D. and an and Washington, and in the District of Columbia. Troy X. Kelley?s experience includes as counsel, and then general counsel,-for a real estate title company in California, as - president of'a division of that company, and as a small business owner and operator whose business served the title industry. 22. in the State of Nevada on or about October 26,2000. Since Blackstone?s inception, Troy Blackstone International, Inc. (?Blackstone?), is an Corporation formed X. Kelley has been Blackstone?s President and sole owner. 23. Attorney Trustee Services, Inc. is an Corporation. Originally, Troy X. Kelley?S wife, D.D.K., was the President of ATS. Subsequently, Troy X. Kelley became the President of ATS. Through at least 2008, D.D.K. was the sole owner of ATS. 24. United National, LLC (?United National?), was a limited liability company I incorporated in Washington State on or about August 2,2002. Troy X. Kelley was United National?s President. Originally, Blackstone owned 50% of United National. By 2008, Blackstone owned 79.3% of United National, ATS owned 18.1% of the company, and a minority partner owned 2.6% of the company. United National operated under the I name Post Closing Department (also known as and provided reconveyance- tracking services to real estate escrow companies. On August 11, 2008, Troy X. Kelley cancelled United National?s registration in Washington State. - UNITED STATES ATTORNEY 700 STEWART STREET, Sum: 5220 SEATTLE, WASHINGTON 98101 (206) 553-7970 Seizure Warrant Af?davit- 6 USAO No: 2012R01085 Case Document 1 Filed 09/02/15 Page 8 of 206 25. Fidelity National Title of Washington (?Fidelity?) and Old Republic Title (?Old Republic?) were escrow companies that offered real estate settlement services in Washington State. United National d/b/a Post Closing Department, provided reconveyance?tracking services to these escrow companies. 2. The Reconveyance-Processing Industry 26. (?borrowers?) are required to grant a deed of trust to a trustee. The trustee holds title to Generally, individuals who borrow money to purchase a home the property on behalf of the lender, pursuant to that deed of trust, to secure repayment of the loan. When an underlying loan is paid in full, such as through the sale of the property orthrough a re?nancing, the lender sends the trustee proof of repayment, after which the trustee transfers title back to the original borrower. The process of transferring title baCk to the borrower is called ?reconveyance.? The reconveyance process is completed when a deed of reconveyance is executed by the trustee and recorded in the recorder?s of?ce of the county where the property is located. Trustees may charge a fee to process a reconveyance (a ?trustee fee?), and county recording of?ces generally charge a fee to record a reconveyance (a ?county recording fee?). 27. disburse loan funds and sales proceeds, and facilitate documentation, all in accordance Escrow companies performing real estate settlement services collect and with the escrow instructions of the parties to a real estate transaction. As part of their service, escrow companies also facilitate the reconveyance process by collecting from borrowers fees in amounts suf?cient to cover the potential costs associated with the reconveyance process. 28'. cost of paying trustee fees and county recording fees (collectively, ?reconveyance- The potential costs associated with the reconveyance process include the processing fees?), as well as the cost of tracking reconveyances to ensure that they are completed (?reconveyance tracking?). During the period relevant to this Af?davit, escrow companies typically collected between $100 and $150 per reconveyance (a UNITED STATES ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTLE, WASHINGTON 98101 (206) 553-7970 Seizure Warrant Af?davit- 7 USAO No: 2012R01085 Case Document 1 Filed 09/02/15 Page 9 of 26 ?reconveyance fee?) from borrowers to cover reconveyance-processing fees and reconveyance-tracking costs. 29. In many cases, lenders processed reconveyances themselves, either for a minimal fee charged directly to the borrower as part of the borrower?s loan payoff, or for no fee. When lenders processed reconveyances, escrow companies did not need to pay reconveyance-processing costs, such as trustee fees or county recording fees. 30. Rather than administer reconveyance fees and track reconveyances themselves, in some cases, escrow companies contracted with outside vendors that administered reconveyance fees and performed reconveyance?tracking services. Post Closing Department was a vendor utilized by escrow companies to administer reconveyance fees, and track reconveyances, for the bene?t of escrow parties. B. The Reconveyanee?Fee Fraud Scheme 1. The Fraud Relating to Fidelity 31. Fidelity; Both orally and in writing, Troy X. Kelley represented that, for a ?at fee of $15 During 2003, Troy X. Kelley entered into a business agreement with per ?le, Post Closing Department would (1) provide Fidelity reconveyance-tracking services for real estate transactions in King and Snohomish Counties; receive from Fidelity the full amount of reconveyance fees entrusted to Fidelity by borrowers; and, where Post Closing Department was not required to use the full amount of those fees to pay trustee fees and/or county recording fees, or its own $15 reconveyance-tracking fee, return the unused portion of reconveyance fees to borrowers. 32. 9, Fidelity as the ?Client,? and borrowers as ?Customers,? and provided, in A written agreement, signed by Fidelity?s Operations Manager on October relevant part: Fees are as follows: $15.00 post closing tracking fee per item. Payment Terms: Client shall collect post closing fee and make check payable to PCD (leave the check to be picked up by representative UNITED STATES ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTLE, WASHINGTON 98101 (206) 553-7970 Seizure Warrant Af?davit- 8 USAO No: 2012R01085 4; Case 2:15-rnc-00129-BAT Document 1 Filed 09/02/15 Page 10 of 26 and/or coordinator). Expenses such as trustee fees and recording fees that are associated with a file will be advanced and charged to that file. At the completion of the post closing documentation if extra funds are left over, PCD shall forward the funds to Customer, with sample letter attached. 33. in 2003, Fidelity began using Post Closing Department to perform reconveyance?tracking In reliance upon Troy X. Kelley?s representations and promises, beginning work, and caused borrowers to authorize disbursement of funds from Fidelity to Post Closing Department for reconveyance processing and tracking. Fidelity provided Post Closing Department ?les accompanied by checks made payable to Post Closing Department in the full amount of the reconveyance fees that had been entrusted to Fidelity for reconveyance processing and tracking by borrowers. Troy X. Kelley and Post Closing Department employees subsequently cashed those checks, depositing the funds into an account at Columbia Bank that Post Closing Department used to hold funds received from Fidelity. In doing so, Troy X. Kelley and the employees caused wire communications to be transmitted in interstate commerce in order to effect the transactions. 34. entered the data for each reconveyance into a line in a large spreadsheet. Post Closing To track Fidelity?s reconveyances, a Post Closing Department employee Department then tracked the reconveyances by legging onto county recorder?s of?ces? websites to check the status of the reconveyances. When a title was reconveyed, an employee noted the number assigned to the reconveyance in the spreadsheet. Because the employees understood that Post Closing Department received a ?at $15 fee per transaction tracked, they did not use the spreadsheet to record the speci?c work performed on each file. 7 35. Post Closing Department tracked, Post Closing Department generally did not need to Because major lenders processed the vast majority of the reconveyances perform additional work, or pay additional trustee fees or county recording fees, to effect reconveyances. As a result, in the vast majority of cases, Post Closing Department UNITED STATES ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTI..E, WASHINGTON 98101 (206) 553-7970 Seizure Warrant Affidavit? 9 USAO No: 2012R01085 Seizure Warrant Af?davit- 10 Case Document 1 Filed 09/02/15 Page 11 of 26' received from Fidelity, and retained at the completion of the reconveyances, funds entrusted to Fidelity to cover possible reconveyance-processing costs that were not actually needed to pay a trustee fee or a county recording fee. 36. and arti?ce to defraud Fidelity and borrowers, to obtain money from Fidelity by means of By no later than in or about January 2006, Troy X. Kelley devised a scheme false and fraudulent representations, and to steal money from Fidelity and from borrowers, namely to take and convert to his own use and bene?t reconveyance- processing fees that Troy X. Kelley knew should have been refunded to borrowers; 37. continuing to keep up a pretense that Post Closing Department was administering fees as Troy X. Kelley decided to stop paying refunds to borrowers, all the while, promised, and continuing to obtain from Fidelity fees entrusted to Fidelity by borrowers. Unbeknownst to Fidelity and borrowers, and contrary to his representations and promises, Troy X. Kelley directed Post Closing Department employees to issue refund checks in limited circumstances, typically when an escrow company or a borrower complained that the borrower had not received a refund to which the berrower was entitled. 38. keeping unused reconveyance?processing fees, Troy X. Kelley falsely and fraudulently To conceal ?thher from idelity the fact that Post Closing Department was represented to Fidelity that Post Closing Department charged only a ?at $15 fee per transaction tracked. 39. employee at Fidelity, advising that Ticor Title was raising its trustee fees to $120, For example, on February 16, 2006, Troy X. Kelley sent an email to an suggesting that Fidelity might want to do the same, and noting that PCD would hold only $105 in processing fees ?after our $15 fee.? 40. Similarly, on May 9, 2007, Troy X. Kelley caused an employee to send an email to an employee at Fidelity, stating that Post Closing Department collected $15 per ?le, and that, in tracking each ?le, Post Closing Department sent lettersand made telephone calls. UNITED ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTI..E, 98101 No: 2012R01085 . (206) 553.7970 t?Il t?d w't?A n?d o?-s u?4 r?d IvKl} Case Document 1 Filed 09/02/15 Page 12 of 26 41. And on July 31, 2007, Troy X. Kelley sent an email to an employee at Fidelity, stating that he wanted ?to con?rm our fees are $15 per deed of. trust tracked and we hold what you direct us to in order that the trustee gets paid and records the reconveyance.? In reliance upon these false representations, Fidelity continued to cause borrowers to instruct at closing that reconveyance fees entrusted to Fidelity be disbursed to Post Closing Department, and Fidelity continued to disburse such fees to Post Closing Department. 42. Department to track reconveyances. After being noti?ed of that fact, on March 14, 2008, In approximately March 2008, Fidelity decided to stop using Post Closing Troy X. Kelley sent an employee at Fidelity an email in which he offered to continue tracking idelity?s reConveyances for a ?at fee of $15 per transaction tracked, while allowing Fidelity to retain the remainder of the reconveyance fees. The email stated, in relevant part: I just wanted to let you know that there is a reconveyance service model that allows you to hold the income generated and we are paid though a invoice that is $15 per ?le. 43. On April 7, 2008, Troy X. Kelley sent a similar email to another employee at Fidelity, stating, in relevant part: I want to con?rm the option that we can track new payoffs . . . . Our price is still only $15 per item and can be invoiced . . . We operate this way for six counties in Oregon . and we even advance substantial recording fees on Fidelity?s behalf. We do all the work after close, and Fidelity holds the money. I Despite Troy X. Kelley?s emails, Fidelity stopped using Post Closing Department in March 2008. 44. After Fidelity stopped using Post Closing Department to provide reconveyance-tracking services, Troy X. Kelley terminated one of the Post Closing Department employees who had been primarily responsible for performing thework for Fidelity. In approximately May 2008, Troy X. Kelley picked up the Post Closing UNITED STATES ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTLE, 98i 01 (206) 553-7970 Seizure Warrant Af?davit- 11 USAO No: 2012R01085 Case Document 1 Filed 09/02/15 Page 13 of 26 Department documents remaining at the employee?s residence, and caused all Post Closing Department-related ?les to be deleted from the employee?s computer. . 45. reconveyances Post Closing Department tracked for Fidelity, Post Closing Department Because major lenders had processed the vast majority of the retained a substantial. amount of unused reconveyance?processing fees. Between January 2006 and March 2008., Fidelity asked Post Closing Department to track approximately 21,158 reconveyances. Of these, Fidelity collected reconveyance fees in an amount designed to cover reconveyance-processing costs, as well as reconveyance-tracking costs, in approximately 18,208 cases. 46. With respect to those reconveyed transactions, Post Closing Department had been By March 2008, the vast majority of the ?les tracked had reconveyed. required to issue only approximately 460 checks to pay reconveyance-processing fees. Accordingly, Post Closing Department should have refunded unused reconveyance- . processing fees to thousands of borrowers. In fact, however, Post Closing Department had issued only approximately 25 refund checks, totaling approximately $4,340, to borrowers from the Columbia Bank account that it used to conduct Fidelity business. (Post Closing. Department had issued approximately 423 additional checks to pay reconveyance?processing fees from bank accounts not related to speci?c escrow companies, and had issued approximately 34 additional refund checks, totaling approximately $8,837, from such accounts. Some of those checks may have related to borrowers in transactions that Post Closing Department tracked fer Fidelity.) 47. Instead of refunding unused reconveyance-proce'ssing fees to borrowers, Troy X. Kelley retained the vast majority of these fees in the Columbia Bank-account from which he conducted Fidelity business. As a result, the balance in this account, which was $745,121 on January 1, 2006, had grown to $2,361,181 by June 2008. (In addition, during the same period, although Post Closing Department was entitled to only approximately $317,370 for reconveyance-tracking services that it performed for UNITED STATES ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTLE, WASHINGTON 98101 (206) 553?7970 Seizure Warrant Af?davit- 12 USAO No: 20121101085 u? r?u-t t?d- e?I l?L11 Case Document 1 Filed 09/02/15 Page 14 of 26 Fidelity, Troy X. Kelley transferred approximately $443,006 from the account to his own personal account at Bank of America.) 2. The Fraud Relating to Old Republic 48. By no later than April 2006, Troy X. Kelley devised a scheme and arti?ce to defraud Old Republic and borrowers, to obtain money from Old Republic by means of false and fraudulent representations, and to steal money from Old Republic and borrowers. This scheme was functionally?identical to the scheme to defraud Fidelity. 49. President of Old Republic. Troy X. Kelley falsely and fraudulently represented that, fOra On or about April 10, 2006, Troy X. Kelley met with a Senior Vice ?at fee of $20.00 per reconveyance, Post Closing Department would provide reconveyance-tracking services for real estate transactions in which Old Republic acted as the escrow agent; receive from Old Republic the full reconveyance fees entrusted to Old Republic by borroWers; and, where Post Closing Department was not required to use the full reconveyance fees to pay trustee fees and county?recording fees, or its own $20 reconveyance-tracking fee, it would return the unused reconveyance-processing fees to borrowers. 50. of?cer an email in which Troy X. Kelley stated that he had created a re?md letter for a On or about the following day, Troy X. Kelley sent the Old Republic client who ?wanted to hit the issue of the refund and integrity extra hard.? The letter provided, in relevant part: To ensure that the reconveyance is done properly, Old Republic collects a Post Closing fee for each reconveyance. A portion of this fee is charged to track county records for your reconveyance and the balance is charged so that Old Republic or another trustee can process your reeonveyanee if additional [funds] are needed. In your case, the county records show the reconveyance document has been recorded, so we can close our ?le and we are refunding you the excess processing fee. A Seizure Warrant Affidavit- 13 STATES ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTLE, WASHINGTON 98101 (206) 553-7970 I No: 20121101085 t? l?l I?l .r?n p?a bun'Jl 4h- Case Document 1 Filed 09/02/15 Page 15 of 26 51. In May 2006, Old Republic and Post Closing Department signed an agreement for Post Closing Department to provide reconveyance-tracking services to Old Republic. The agreement provided, in relevant part: Fees are as follows: $20.00 post closing tracking fee per item, fee includes management of funds due trustees client refunds are Additional Terms and Conditions: PCD shall provide client with progress reports of reconveyance activity on each of client?s ?les being tracked as well as an accounting on all funds received from client that have been disbursed and/or refunded to principals. 52. However, Troy X. Kelley did not intend for Post Closing Department to issue refund checks to the vast majority of borrowers to whom refunds were owed. Instead, Troy X. Kelley intended to take and convert to his own bene?t reconveyance- processing fees that Troy X. Kelley knew should have been refunded to borrowers. 53. promises, Old Republic began using Post Closing Department to provide reconveyance In June 2006, in reliance upon Troy X. Kelley?s representations and tracking services. Old Republic caused borrowers to instruct at closing that reconveyance fees entrusted to Old Republic be disbursed to Post Closing Department and Old Republic disbursed such fees to Post Closing Department. 54. Old Republic provided Post Closing Department ?les accompanied by checks made payable to Post Closing Department in the full amount that had been entrusted to Old Republic for reconveyance precessing and tracking by borrowers. Troy X. Kelley and Post Closing Department employees subsequently cashed those checks, depositing the funds into an account at Columbia Bank that Post Closing Department used to hold funds received from Old Republic. In doing so, Troy X. Kelley and the UNITED STATES 700 STEWART STREET, SUITE 5220 SEATTLE, WASHINGTON 98101 (206) 5534970 Seizure Warrant Af?davit- l4 USAO No: 20121101085 Case Document 1 Filed 09/02/15 Page 16 of 26 employees caused wire communications to be transmitted in interstate commerce in order to effect the transactions. 55. To track Old Republic?s reconveyances, Post Closing Department- employees entered the data for each reconveyance into a line in a large spreadsheet. Post Closing Department then tracked the reconveyances by logging onto county recorder?s of?ces? websites to check the status of the reconveyances. When a title was reconveyed, an employee noted the number assigned to the reconveyance in a spreadsheet. Because employees understood that Post Closing Department received a ?at $20 fee per transaction tracked, the employees did not usethe spreadsheet .to reCord the speci?c work they performed on each ?le. 56. Unbeknownst to Old Republic and borrowers, and contrary to his representations and promises, Troy X. Kelley directed Post Closing Department employees to issue refund checks in only two limited situations. First, when an escrow company or a borroWer complained that the borrower had not received a refund to which the borrower was entitled, Troy X. Kelley directed an employee to issue a refund check to that borrower. Second, on rare occasions, Troy X. Kelley directed Post Closing Department employees to issue small batches of refund checks. Troy X. Kelley did this either to respond to questions from Old Republic, or to create a defense in the event of that he subsequently was questioned about Post Closing Department?s actions. 57. To conceal from Old Republic the fact that Post Closing Department was keeping unused reconveyance?processing fees, Troy X. Kelley falsely and fraudulently represented to Old Republic that Post Closing Department continued to charge only a ?at $20 fee per transaction tracked. For example, on March 26, 2007, a representative of Old Republic emailed Post Closing Department asking, among other things, you have a fee schedule . . . Troy X. Kelley caused an employee of Post Closing Department to respond, ?[t]he fee is $20 ?at for each item (each DOT to be tracked).? UNITED STATES ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTLE, WASHINGTON 98101 (206) 553-7970 Seizure Warrant Af?davit- 15 USAO No: 2012R01085 Case Document 1 Filed 09/02/15 Page 17 of 26 58. On July 26, 2007, Troy X. Kelley again represented that Post Closing Department chargeda ?at fee in an email to an Old Republic employee in which he stated, in relevant part: It seems that most companies are raising their trustee (recon) - fee by $10 to offset the two County Recorder?s increases. Thus they are having us increase the funds held by $10. Our $20 tracking fee does NOT change. 59. At some point, Old Republic employees in tact requested proof that Post Closing Department was using reconveyance fees appropriately. Thereafter, Troy X. Kelley regularly directed a Post Closing Department employee to produce ?zeroed out? spreadsheets. These spreadsheets showed that all reconveyance fees relating to borrowers whose reconveyances had completed had been (I) paid out as third?party fees to trustees or county recorder?s of?ces, or (2) refunded to the borrower. Troy X. Kelley provided the employee the check number that supposedly had been used to make one payment, and directed that the employee have the spreadsheets show that payments relating to other borrowers had been made using the next-in?sequence checks. 60. spreadsheets that falsely showed that large numbers of third-party and refund payments After the Post Closing Department employee prepared ?zeroed out? had been made, Troy X. Kelley caused the spreadsheets to be provided to the Old Republic personnel who-had requested the information as supposed proof that Post Closing Department was handling reconveyance fees appropriately. However, Troy X. Kelley knew that Post Closing Department had not made the payments to trustees and county recorder?s of?ces shown in the spreadsheets, and that it was not paying refunds as required. 61-. Because major lenders processed the vast majority of the reconveyances that Post Closing Department tracked for Old Republic, Post Closing Department retained asubstantial amount of unused reconveyance-processing fees. Between June 2006 and June 2008, Old Republic asked Post Closing Department to track approximately 11,773 reconveyances. Of these, Old Republic collected reconveyance UNITED STATES ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTLE, WASHINGTON 98101 (206) 553-7970 Seizure Warrant Af?davit- 16 USAO No: 2012R01085 MN v?l r?n?o?n v?I i?l u?n i?a OO?JoUl-BWNi??Omm?am-hwwh?o Seizure Warrant Af?davit- 17 Case Document 1 Filed 09/02/15 Page 18 of 26 fees in an amount designed to cover reconveyance-processing costs, as well as reconveyance-tracking costs, in. approximately 9,072 cases. 62. Department was tracking for Old Republic had been completed. With respect to'those By June 2008, more than 3,500 of the reconveyances that Post Closing reconveyed transactions, Post Closing Department had been required to issue only approximately 150 checks to pay reconveyance-processing fees. Accordingly, Post Closing Department should have refunded unused recOnveyance-processing fees to thousands of borrowers. In fact, however, Post Closing Department issued only approximately 30 refund checks, totaling approximately $5,660, to borroWers. (Post Closing Department had issued approximately 423 additional checks to pay reconveyance-processing fees from bank accounts not related to speci?c escrow companies, and had issued approximately 34 additional refund checks, totaling approximately $8,837, from such accounts. Some of those checks may have related to borrowers in transactions that Post Closing Department tracked for Old Republic.) 63. Instead of refunding unused reconveyance-processing fees to borrowers, Troy X. Kelley retained the vast majority of these fees in the Columbia Bank account from which he conducted Old Republic business. As a result, the balance in this account had grown to $888,949 by June 2008. (In addition, between June 2006 and June 2008, TROY X. KELLY transferred approximately $95,000 from the account to his personal account at Bank of America.) C. Possession and Concealment of Stolen Property 64. District Court for the Western District of Washington against Fidelity and Old Republic. The class actions, Cornelius v. Fidelity National Title Insurance, C08-0754MJP (W.D. Wash), and McFerrin v. Old Republic Title, C08-5309BHS (W.D. Wash), alleged, On May 14, 2008, class action lawsuits were ?led in the United States among other things, that Fidelity and Old Republic collected reconveyance-processing fees from borrowers, that, even though they went unused, portion of the reconveyance processing fees [were] credited or returned with the ?nal settlement,? and UNITED STATES ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTLE, WASHINGTON 98101 (206) 553?7970 USAO No: 2012R01085 00 0\ 43 N1 v?t r?A I??Li! Case Document 1 Filed 09/02/15 Page 19 of 26 that the two companies ?kept these duplicative and unearned sums for no settlement services rendered . . . Troy X. Kelley learned of the existence of'these class action lawsuits no later than the day after they were ?led, that is, May 15, 2008.. 65. Within a month after learning of the class action lawsuits, Troy X. Kelley sought to Conceal $3,782,226 held in Post Closing Department?s Columbia Bank I accounts by moving the money through a series of convoluted wiretransfers through various newly-opened bank accounts. As part of this series of transfers, Troy X. Kelley transferred the money out of the State of Washington and into accounts opened in the name of entities not associated with United National or Post Closing Department. 66. On June 10, 2008, Troy X. Kelley opened Wells Fargo Bank account *3310, in the name of United National. 67. On June 12, 2008, Troy X. Kelley wire transferred (1) $2,361,181. from the Columbia Bank account that he had used for Fidelity business, (2) $888,949 from the Columbia Bank account that he had used for Old Republic business, and (3) $532,096 from the Columbia Bank account number that he had used for Stewart Title business, for a combined total of $3,782,226, into the newly opened Wells Fargo Bank account *3310. 68. On June 12, 2008, Troy X. Kelley opened US. Bank account *7633 in the name of United National. 69. On June 13, 2008, Troy X. Kelley Wire transferred $3,785,667 from the United National?s Wells Fargo Bank account *3310 to the newly?Opened US. Bank I account *7633, held in the name of United National. 70. On June 17, 2008, Troy X. Kelley opened Nevada State Bank account *6040 in the name of Blackstone. 71. On June 18, 2008, Troy X. Kelley wire transferred $3,784,619 from the US. Bank account *7633, held in the name of United National, to the newly-opened Nevada State Bank account *6040 in Nevada, held in the name of Blackstone. UNITED STATES ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTLE, WASHINGTON 98101 (206) 553-7970 Seizure Warrant Af?davit- 18 USAO No: 2012R01085 p?n Case Document 1 Filed 09/02/15 Page 20 of 26 72. Of the $3,784,619 in United States funds transferred to the Blackstone account at Bank of Nevada on June 18, 2008, $1,618,744 represented funds that Kelley had failed to refund borrowers, or to-pay third party trustees or counties. 73. To ascertain what fees were earned and what fees were unlawfully retained, an FBI forensic accountant employed a conservative accounting principle which assumed that the unlawfully?retained. funds were the last to be deposited and the ?rst to be withdrawn. 74. in this case, which forms the basis for some of the information set forth in this Af?davit, The FBI fOrensic accountant who performed most of the ?nancial analysis . is currently being audited by the IRS in connection with his 2012 tax ?ling. The IRS originally challenged more than $25,000 of deductions claimed by the forensic accountant on a Schedule filed as part of that return. The forensic accountant has provided the IRS requested documentation, and the IRS has accepted approximately half of the deductions. The forensic accountant has agreed not to pursue one of the deductions, which he considers debatable. The other deductions have yet to be resolved. 75. During the pendency of this investigation, the forensic accountant has been interviewed by FBI agents in conj unctiOn with an investigation being conducted in another District. The interview related to the forensic accountant?s former employment as comptroller at a Seattle ?rm, and, specifically, to that firm?s payments to two individuals, one of whom (?Individual has been indicted for tax evasion. The forensic accountant?s ?rm owed money to Individual 1 and was making payments to Individual 1 through an intermediary. After the intermediary was served with a notice of levy that required the intermediary to turn over money that he owed to Individual 1 to the IRS instead, Individual 1 asked the ?rm to-pay him directly. The forensic accountant was aware that a lawyer associated with the ?rm had stated that changing to direct payment of - Individual 1 under these circumstances might be illegal. Although the ?rm initially declined to pay Individual 1 directly, it subsequently decided to do so. A lawyer associated with the ?rm provided the forensic accountant with guidance to pay Individual UNITED STATES ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTLE, WASHINGTON 98101 (206) 553-7970 Seizure Warrant Af?davit- 1'9- USAO No: 2012R01085 Case Document 1 Filed 09/02/15 Page 21 of 26 1 (or a designee) directly, and the forensic accountant did so. The forensic accountant has not been advised that he or she is either a target or subject of the investigation, and I the government does not anticipate seeking charges against the forensic accountant. 76. Fidelity National Title and Old Republic Title based upon fee agreements and worksheets. The FBI forensic accountant determined the legitimate earned fees for both provided by both title companies, and upon bank records. 77. Based upon these assumed earnings and upon known payments made to escrow and/or title companies, made as refunds, or made as payments for county recording fees, the forensic accountant determined that of $3,844,282.07 deposited in. respective Columbia Bank accounts from Fidelity National Title and Old Republic Title, $2,964,679.52 in United States funds should have been returned to them, or to their borrowers. 78. Applying this analysis, accounting for the pre-consolidation transfers into main Operating account, payments made to Troy X. Kelley during the period of January 1, 2006 through June 30, 2008, and other disbursements, approximately $1,618,744 in funds Kelley had failed to refund to borrowers was transferred to the Blackstone account at Bank of Nevada on June 18, 2008. 79. United States funds that were taken by fraud from Fidelity National Title and borrowers between January 2006 and March 2008, and taken by fraud from Old Republic Title and borrowers between June 2006 and June 2008, in violation of 18 U.S.C. 1343, and stolen As such, Troy X. Kelley did possess and conceal at least $1,618,744 in by Troy X. Kelley between January 2006 and June 2008, all in the State of Washington, and which had crossed state lines by virtue ofbeing transferred to an account in the name of Blackstone International, Inc., at Nevada State Bank, in the State of Nevada, and did so knowing that the $1,618,744 in United States funds had been stolen, unlawfully converted, and taken, a violation of Title 18, United States Code, Section 2315. UNITED STATES ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTLE, WASHINGTON 9810! (206) 553-7970 Seizure Warrant Affidavit- 20 USAO No: 2012R01085 tun-d .p?d t?i-h?d v?a G900 Case Document 1 Filed 09/02/15 Page 22 of 26 D. Money Laundering 80. On June 23, 2008, Troy X. Kelley formed Berkeley United National, LLC (?Berkeley United?), a Nevada limited liability company. At approximately the same time, Troy X. Kelley formed Wellington Trust, a trust organized under the laws of Belize. Although Troy X. Kelley did not technically own Wellington Trust, for all practical purposes, Troy X. Kelley controlled the trust, which operated for his bene?t. Wellington Trust owned 99% of Berkeley United. Blackstone owned the remaining 81. On June 23, 2008, Troy X. Kelley transferred out $149,870 in United States funds from Blackstone?s Nevada State Bank account *6040 to a Vanguard account *6680, held in the name of Blackstone. I 82. On une 26, 2008, Troy X. Kelley opened Vanguard account *8746 in the name of Berkeley United. 83. On June 27, 2008, Troy X. Kelley transferred $3,634,673 from the Blackstone?s Nevada State-Bank account *6040, in Nevada, to the newly-opened Berkeley United account *8746 at Vanguard, in Of the funds included in this transaction, the FBI forensic accountant, again using the most conservative accounting principles, and accounting for debits including the $149,870 transfer referenced above in paragraph 81, has calculated that approximately $1,463,171 were tainted proceeds of converted, non-refunded reconveyance fees. 84. In doing so, Troy X. Kelley knowingly conducted a ?nancial transaction involving the proceeds of speci?ed unlawful activity (Possession and Concealment of Stolen Goods and Wire Fraud), with the intent, as evidenced by the account being held in the name of a company almost wholly owned by a trust domiciled inBelize, to conceal the nature, location, source, ownership, and control of the proceeds of speci?ed unlawful activity, a violation of Title 18, United. States Code, Section 85. Vanguard account *8746 were subject to forfeiture pursuant to Title 18, United States As a consequence of this action, the entire contents of the Berkeley Code, Section as property involved in a money laundering transaction. STATES ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTLE, WASHINGTON 98:01 (206) 553-7970 Seizure Warrant Af?davit- 21 USAO N0: 2012R01085 Case Document 1 Filed 09/02/15 Page 23 of 26 E. Subsequent Activity and the Movement of Funds Traceable to Money Laundering 86. In approximately June 2008, TROY X. KELLY transferred Post Closing Department?s two remaining employees in the State of Washington from Post Closing Department?s payroll to the payroll of ATS. On the evening of June 25, 2008, a ?re was reported at the Stewart Title of?ces in Everett, Washington. By 11:00 pm, on June 25, 2008, Stewart Title had burned to the ground. Troy X. Kelley subsequently represented that all of Post Closing Department?s recOrds had been destroyed in that ?re and in a subsequent crash of his computer. 87. operations in the States of Washington and Oregon, Troy X. Kelley ?led a-Certi?cate of On August 11, 2008, having shut down Post Closing Department?s Withdrawal/Cancellation with the Washington. State Secretary of State, thereby immediately canceling the registration of United National, d/b/a Post Closing Department. 88., Department, the class action plaintiffs served Troy X. Kelley with subpoenas demanding On September 23, 2008, after learning of the existence of Post Closing that he produce books and records. On that same date, to ensure his ability to further conceal the funds he'previously had hidden from the class action litigants, Troy X. Kelley submitted to Vanguard .an International Wire Option Form, providing him with the option of wiring funds from the Berkeley United account at Vanguard, to an account in the name of Wellington Trust at Atlantic International Bank in Belize. - 89. On March 3, 2009, counsel for class-action defendant Old Republic ?led a third?party complaint against Troy X. Kelley charging, among other things, that, by failing to refund unused reconveyance-processing fees to borrowers, Post-Closing Department had breached its agreement with, and been unjustly enriched to the detriment of, Old Republic. 90. to locate the stolen ?nds that Troy X, Kelley had concealed. They did so by issuing Between March 2009, and September 8, 2009, counsel for Fidelity sought UNITED STATES ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTLE, 98101 (206) 553-7970 Seizure Warrant Af?davit- 22 20i2R01085 mummewmwoomqomewNa?o Case Document 1 Filed 09/02/15 Page 24 of 26 subpoenas to Columbia Bank, Wells Fargo Bank, Washington Mutual Bank, US. Bank, HSBC, and, ultimately, on September 8, 2009, to the Vanguard Group. 91. On July 9, 2009, and October 29, 2009, for various reasons, the Court dismissed the class action lawsuits against Old Republic and Troy X. Kelley. Likewise, on April 1, 2010, the Court dismissed the class action lawsuit against Fidelity. 92. On December 10, 2009, Old Republic ?led a new lawsuit against Troy X. Kelley, in King County Superior Court. On June 6, 2010, that lawsuit was removed to the United States District Court for the Western District of Washington, Old Republic Title, Ltd. v. Tmin .Kelley, et al, No. (W.D. Wash). All ofOld - Republic?s claims stemmed from its core allegation that Troy X. Kelley had agreed, in June 2006, to perform reconveyance-tracking services for a ?at fee of $20 per escrow transaction, and to refund all other unused reconveyance fees to borrowers, but that Troy X. Kelley instead improperly had kept the unused fees. I 93. On May 3, 2011, Old Republic and Troy X. Kelley settled Old Republic Title, Ltd. v. Troy Kelley et Following that settlement, Troy X. Kelley paidOld Republic $1,050,000, in order that Old Republic could refund the money to borrowers. Kelley Wire transferred the $1,050,000 out of the Berkeley United Vanguard account *8746. 94. After he settled Old Republic Title, Ltd. v. Troy Kelley et al., Troy X. Kelley maintained approximately $2,581,653 of the funds he had concealed during June 2008 in the Berkeley United account *8746 at Vanguard. Beginning in 2011, Troy X. Kelley transferred $245,000 per year to accounts he controlled, which he then reported as income on Forms 1120-8 he ?led with the IRS. on behalf of Blackstone. Troy X. Kelley sought to evade the full taxes due and owing on the reported income, however, by fraudulently deducting various items as business expenses, knowing full well that the deductions were not for legitimate business expenses. 95. On about June 3, 2011, Kelley wired $245,030 from the Berkeley United Vanguard account *8746 to a Wells Fargo Berkeley United account *7983. On about UNITED STATES ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTLE, WASHINGTON 98m! (206) 553-7970 Seizure Warrant Af?davit- 23 USAO No: 2012R01085 N. I-?Case Document 1 Filed 09/02/15 Page 25 of 26 June 7, 2011, Kelley wrote a check from the Wells Fargo Berkeley United account *7983 in. the amount of $245,000 to Blackstone International and deposited the check into Columbia bank account *8470, held'in the name of Blackstone. No further withdrawals from the Berkeley Vanguard account *8746 were made in 2011. 96. $245,000 check from the Berkeley Vanguard account *8746 to Blackstone and deposited The following year, on about January 6, 2012, Kelley wrote another the check into Blackstone?s Columbia account *8470. Then, on February 1, 2012, Kelley took $2,090,818, which was the vast majority of the remaining balance, from the Berkeley United Vanguard account *8746 and deposited the funds into a Vanguard account *6680 opened in the name of Blackstone. No further withdrawals were made from the sums deposited into the Blackstone Vanguard account *6680 in 2012. Berkeley United was dissolved sometime in 2012. 97. In each of 2013, 2014, and 2015, Troy X. Kelley withdrew an additional $245,000 from the Blackstone account *6680 at Vanguard. As a result, by February 27,? 2015, the balance in the Blackstone account *6680 at Vanguard had been reduced to $1,355,843. 98. On March 26, 2015, Troy X. Kelley wrote a check to the United States Treasury for $447,421. On the memo line of that check, Troy X. Kelley wrote ?Form 1040 2016-2020.? I 99. $908,397.51 to the. trust account a law ?rm that he had retained to represent him in Also on March 26, 2015, Troy X. Kelley wrote a check in the amount of connection with the federal criminal investigation of his actions, Davis, Wright, Tremaine Trust account no. ?3414 at Bank of America. 100. This $908,397.51 in United States funds, now contained in the trust account of the law ?rm retained by Troy X. Kelley, were drawn from the Vanguard account *6680, held in. the name of Blackstone, which in turn was traceable to the Vanguard account *8746, held in the name of Berkeley United. Thus, the $908,397.51 in United States funds constitute property that is traceable to property involved in a money UNITED STATES ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTLE, WASHINGTON 98101 (206) 553-7970 Seizure Warrant Affidavit? 24 USAO No: 2012R01085 Case Document 1 Filed 09/02/15 Page 26 of 26 laundering transaction, speci?cally the wire transfer of $3,634,673 from Blackstone?s Nevada State Bank account *6040 to the Berkeley United Vanguard account *8746, which consisted of at least approximately $1,463,171 in tainted proceeds of converted, non?refunded reconveyance fees and proceeds of wire fraud that were comingled with purported legitimate funds. VII. CONCLUSION Based on my training and experience as a Special agent and on the information Contained within this af?davit, I believe that probable cause exists, and do believe, that the sum of $908,397.51 in. United States funds contained in Bank of America trust account No. ~3414, that was transferred from Vanguard Prime Money Market Fund Account held in the name of Blackstone International, Inc., via Check No. 1007 dated March 26, 2015 constitutes property traceable to property involved in . ?nancial transactions designed to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of speci?ed unlawful activity (Possession and Concealment of Stolen Funds, a violation of 18 U.S.C. 2315, and Wire Fraud, a Violation of 18 U.S.C. 1343), in violation of 18 U.S.C. 1956(a)(1)(B)(i) (Concealment Money Laundering). As such, the above-listed funds are subject to seizure and forfeiture to the United States pursuant to 18 U.S.C. MICHAEL BROWN, Af?ant Special Agent, Federal Bureau of Investigation Md SUBSCRIBED and SWORN to before me this day of September, BRIAN United States Magistrate Judge 2015. UNITED STATES ATTORNEY 700 STEWART STREET, SUITE 5220 SEATTLE, WASHINGTON 98101 (206) 553-7970 Seizure Warrant Af?davit- 25 USAO No: 2012R01085