Utah biodiesel execs linked to polygamous group stay jailed in alleged $511M tax fraud case

These undated file photos released by the Weber County Sheriff's Office show Jacob Kingston, left, and Isaiah Kingston, two Salt Lake City biodiesel executives charged in an alleged $511 million tax credit scheme. | FIle photos courtesy of the Weber County Sheriff's Office via Associated Press, St. George News

SALT LAKE CITY (AP) — Two Salt Lake City biodiesel executives linked to a polygamous group will stay in jail after prosecutors argued they could flee to Turkey if released ahead of trial in an alleged $511 million tax credit scheme.

The men have access private jets, millions of dollars stashed abroad and an unidentified federal law-enforcement contact who apparently tipped them off ahead of a raid, special assistant U.S. Attorney Leslie Goemaat said at a hearing on Wednesday.

There are very real safety concerns for witnesses in this case,” she said.

Washakie Renewable Energy CFO Isaiah Kingston’s attorney said the prosecutor’s allegations are false hearsay.

“He does not have any access to private jet. He has been on one once that had nothing to do with this case,” Scott Williams said. “If anyone made any allegations against you based sorts of things they brought up, you would be appalled.”

U.S. Magistrate Judge Brooke Wells refused an effort to immediately release Kingston, though he’s due back in court on Friday.

A lawyer for his brother, company CEO Jacob Kingston, asked for a detention hearing next week so he can secure defense attorneys from Washington, D.C.

The men are charged with creating fake production records to get renewable-fuel tax credits from 2010 to 2016, then laundering the proceeds. The company once described itself as the largest producer of clean burning and sustainable biodiesel in the state.

Prosecutors 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. Investigators said in court documents members have previously hidden people wanted by police.

A spokesman for the group, Kent Johnson, said in a statement that leaders strongly condemn fraudulent business practices, though members make their own decisions. The group also encouraged “all parties to comply with lawful orders of the court.”

Federal agents raided offices and homes associated with Washakie Energy during their investigation in February 2016. They said they found computers had been recently wiped, that desks were empty and bookcases contained dust outlines where binders of documents had been stored.

It’s not clear how executives allegedly knew about the sealed search warrants, but investigators have said Jacob Kingston told a witness he was tipped off by a federal agent. Investigators from the Environmental Protection Agency, the Internal Revenue Service and the Defense Criminal Investigative Service are among those that have worked on the case.

Meanwhile, Washakie has invested at least $130 million in Turkey, and the brothers own a home there, according to court documents. Jacob Kingston was arrested last week at the Salt Lake City airport with his wife and some of his children as they were about to travel to Turkey, prosecutors said.

Their co-defendant, California businessman Lev Aslan Dermen, has a private plane and previously flew to Turkey when investigators served search warrants on his home in a separate case, prosecutors said. No attorney was listed for him in court records, and he did not appear in the Utah courtroom on Wednesday.

If convicted of charges that include filing a false tax return and money laundering, Jacob Kingston faces up to 87 years in prison. Isaiah Kingston faces up to 20 years.

Written by LINDSAY WHITEHURST, Associated Press.

Email: news@stgnews.com

Twitter: @STGnews

Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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6 Comments

  • Real Life August 29, 2018 at 10:04 pm

    Hope these sick puppies never see the light of day, and get the “special” treatment in the big house.

    • Striker4 August 30, 2018 at 6:44 am

      Set them free ! it’s called free enterprise

      • bikeandfish August 30, 2018 at 9:56 am

        Fraud is “free enterprise”?

        • Striker4 August 30, 2018 at 5:53 pm

          Yep ! the government does it all the time

  • Utahguns August 30, 2018 at 7:27 am

    The Kingston Group polygamist cult is the largest in Utah.
    Here’s a monsterous size cult (about 22,000 members) that have become a focus of the TV show “Escaping Polygamy”. (“Escaping Polygamy” also has a Facebook page)
    This cult makes the mafia look like boy scouts. The reason the TV show is successful is because they document and film the complete and
    outrageous treatment that goes on and how the pain and abuse (sometimes physical) and mental torment of men and women who wish to leave the cult…. occur on a daily basis.
    Although they worship that ever famous child molester, Warren Jeffs, their practices mimic those of Jim Jones (of Jonestown fame).

    They’re taught from early childhood to “Bleed the Beast” ie: shoplift, steal, commit fraud, file fraudulent food stamp claims, and at home, take advantage of their high surrounding walls and covered windows to commit sex acts with young women and boys. Practically every older male member is a mentally disturbed pedophile.
    I’m definitely grateful to live in this state (and I’m “Jack Catholic”) but, I’m completely outraged at the lack of law enforcement intervention and especially the “piousness” of the LDS Church who turn their heads away from this disgusting and continuing behavior of child abuse.

    I hope these charges open up the far-reaching tentacles of this cult. This could be just the tip of the iceberg.

  • Carpe Diem August 30, 2018 at 7:50 am

    Polygamists are a fraud, you say? Who knew? Who paid them the $511 million? ha ha

    Say, did you know why Joe Smith always refused to drink coffee?

    He was afraid he would be stuck in Perkatory.

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