Trial Aims to Explain How a Utah Polygamist Used an Alleged Armenian Gangster to Launder Biofuel Money to Turkey
by Nate Carlisle (Salt Lake Tribune) The possible witness list for the trial of Lev Aslan Dermen includes the Utah polygamist prosecutors say the defendant both conspired with and extorted, the businessman who laundered money to a Turkish airline and a pharmaceutical company, the guitarist for a 1990s Irish rock band, a crooked cop alleged to have worked for Dermen, and a man said to have also extorted the polygamist.
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Jurors are likely to hear about … a Utah biofuel company that participated in a $511 million fraud that spanned both U.S. coasts, down to Central America and across the ocean to Istanbul.
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The proceedings could imprison the 53-year-old Dermen for life if the jury finds him guilty of the 10 counts in an indictment centered on conspiracy, fraud and money laundering.
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Dermen’s high-powered defense attorneys have indicated they will argue it was Washakie’s owners, brothers Jacob and Isaiah Kingston, and other Dermen associates, who committed the crimes. The defense also is expected to tell the jury nothing Dermen did with the blended biofuels broke the law.
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The trial has its roots in Washakie, which promoted itself in advertising across Utah as taking used cooking oils and agricultural byproducts and converting them into biodiesel.
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But instead of manufacturing biofuel, Washakie was frequently buying and trading the biofuel, forging papers to make it appear as though the product was manufactured at its plant near the Utah-Idaho line, and submitting those documents to the U.S. government to collect the tax credit. Prosecutors have said the scheme collected $511 million from taxpayers.
The mastermind?
Jacob and Isaiah Kingston are members of the Davis County Cooperative Society, also known as the polygamous Kingston Group, or the Order. When Jacob and Isaiah Kingston were first indicted with Dermen, it appeared as though Dermen was only a peripheral player. Jacob Kingston, Washakie’s CEO, was listed as the lead defendant and faced the most charges. Later, prosecutors also indicted the brothers’ mother, Rachel Kingston, and Jacob Kingston’s first wife, Sally Kingston.
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He also was cleared in a California trial accusing him of defrauding consumers who bought gas at service stations he owns in the Los Angeles area. Regulations limit biofuel to 20 percent of the gasoline’s mixture; Dermen was accused of selling gas that was half biofuel.
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In a public hearing Sept. 30, prosecutor Arthur J. Ewenczyk contended it was Dermen who helped Jacob Kingston find biofuel to buy and told him where to launder the proceeds. READ MORE
Trial for the last Washakie fraud defendant begins this week: Here’s what you need to know (Salt Lake Tribune)
‘They deal in fraud’ — lawyer blames ex-CEO and Utah polygamist sect for Washakie biofuel scheme (Salt Lake Tribune)
Defense attorney: Polygamist behind $500M biodiesel fraud scheme (Las Vegas Review Journal)
A multimillion-dollar biofuel fraud began with a cowboy hat and a slew of seafood, Jacob Kingston testifies (Salt Lake Tribune)
Washakie’s Jacob Kingston says $30 million from his biofuels fraud went to his Utah polygamous sect (Salt Lake Tribune)
Defense attorney calls Jacob Kingston ‘unhinged’ and ‘untethered’ due to his answers in biofuel fraud trial (Salt Lake Tribune)
Inflation Reduction Act’s expanded biofuel incentives raise concerns about fraud (CNBC)
Excerpt from CNBC: Using a series of shell companies and sham transactions, the team made it look like they were producing massive amounts of biofuel at a plant in northern Utah and shipping it far and wide. That allowed them to rake in millions of dollars in incentives, even though they were producing very little fuel.
The extent of the scam came to light only after a member of the sect who happened to work in the accounting department broke away from the group — she said she was about to be forced to marry her cousin — and told authorities what she knew.
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See how a determined teenage girl exposes a billion-dollar biofuel fraud, and helps cage “The Lion.” Watch the ALL-NEW season premiere of “American Greed,” Tuesday, Sept. 27, (2022) at 10 p.m. ET only on CNBC. READ MORE
