Polygamy, fraud and laun­der­ing at cen­ter of trial

Antelope Valley Press - - BUSINESS - By BRADY McCOMBS

SALT LAKE CITY — Open­ings ar­gu­ments are set this week in Utah for a Cal­i­for­nia busi­ness­man who pros­e­cu­tors ac­cuse of be­ing a key fig­ure in a $511 mil­lion tax credit scheme car­ried out by two ex­ec­u­tives of a Salt Lake City biodiesel com­pany linked to a polyg­a­mous group.

The men from the polyg­a­mous group pleaded guilty last year to money fraud and other charges.

Lev As­lan Der­men has pleaded not guilty to 10 counts, in­clud­ing money laun­der­ing and mail fraud.

Open­ing ar­gu­ments that were sched­uled for Wed­nes­day af­ter­noon were pushed back un­til Thurs­day morn­ing be­cause of lin­ger­ing is­sues in pick­ing a jury from among a group of more than 30 po­ten­tial ju­rors. A jury 16 peo­ple was fi­nally se­lected Wed­nes­day af­ter­noon.

Pros­e­cu­tors say Der­men told the men how to laun­der the money, in­clud­ing buy­ing lux­ury sports cars and mil­lion-dol­lar homes. They say he also bribed law en­force­ment to pro­tect the men, though he’s not charged with bribery.

One of Der­men’s at­tor­neys is Mark Ger­a­gos, a Los An­ge­les lawyer who has rep­re­sented ac­tress Wi­nona Ry­der and mu­si­cians Michael Jack­son and Chris Brown. Ger­a­gos is ex­pected to push back against the pros­e­cu­tors’ as­ser­tion that Der­men was the master­mind of the scheme.

The busi­ness in­volved in the scheme, Washakie Re­new­able En­ergy, once de­scribed it­self as the largest pro­ducer of clean burn­ing and sus­tain­able biodiesel in Utah.

But pros­e­cu­tors say the com­pany was ac­tu­ally cre­at­ing fake pro­duc­tion records to get re­new­able-fuel tax cred­its, then laun­der­ing the pro­ceeds from 2010 through 2016. In­stead of mak­ing their own biodiesel as re­quired in the pro­gram, they were buy­ing and sell­ing bio­fu­els from other places and sell­ing it. Der­men bought some of that sec­ond-hand bio­fuel and sold it at his gas sta­tions, pros­e­cu­tors al­lege.

Com­pany CEO Ja­cob Kingston pleaded guilty in July 2019 to more than three dozen counts, in­clud­ing mail fraud, money laun­der­ing and ob­struc­tion of jus­tice. His brother and com­pany CFO Isa­iah Kingston pleaded guilty to more than a dozen sim­i­lar counts.

Pros­e­cu­tors have said both men are mem­bers of the north­ern Utah-based Davis County Co­op­er­a­tive So­ci­ety, also known as the Kingston Group, which prac­tices polygamy and owns hun­dreds of busi­nesses. Group lead­ers have con­demned fraud­u­lent busi­ness prac­tices.

The money they earned in the scheme was used to buy houses and prop­erty in Tur­key and Belize as well as Utah and Ari­zona, ac­cord­ing to plea doc­u­ments.

Pros­e­cu­tors planned to seize items in­clud­ing a $3.6 mil­lion home in Hunt­ing­ton Beach, Cal­i­for­nia, as well as a Bu­gatti and Lam­borgh­ini as a re­sult of the pleas. Pros­e­cu­tors are also seiz­ing other cars, cash and homes, in­clud­ing an up­scale six-bed­room house in a Salt Lake City sub­urb that was val­ued at $4 mil­lion, ac­cord­ing to county prop­erty records.

Der­men’s trial is ex­pected to last at least one month.


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