Jurors can be persuaded by the multiple witnesses, bank records and correspondence showing Lev Aslan Dermen knew there was a scheme to steal money from a federal biofuel program and launder that cash, or they can be suspicious of the polygamous family members who started the fraud in the first place.
Those were the choices lawyers presented to a federal jury Wednesday during closing arguments.
The panel will begin deliberations for Dermen on Thursday.
He is charged with two counts of conspiracy and eight counts of money laundering related to a fraud at the Utah biofuel firm Washakie Renewable Energy. Dermen faces up to 180 years in prison.
Prosecutors have said the company applied for more than $1.1 billion from a federal program for alternative energy and received $471 million illegally. Washakie CEO Jacob Kingston has already pleaded guilty to more than three dozen charges and agreed to testify in exchange for a prison sentence of no more than 30 years.
In this photo provided by the Davis County Sheriff's Office shows Lev Aslan Dermen. Openings arguments are set Wednesday, Jan. 29, 2020, 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 and are expected to testify against Lev Aslan Dermen, who has pleaded not guilty. (Davis County Sheriff's Office, via AP)
Dermen, 53, owned a chain of gas stations in southern California. In his closing argument Wednesday, federal prosecutor Arthur Ewenczyk played a video clip of a deposition in which Dermen called Washakie one of his suppliers.
Ewenczyk asked why, if Washakie was the supplier, did it send $72 million to bank accounts controlled by Dermen in the United States and Turkey over a stretch of 3½ years ending in December 2015.
“Jacob Kingston was not just another supplier to the defendant,” Ewenczyk said. “Jacob Kingston and the defendant were partners in crime.”
(Francisco Kjolseth | The Salt Lake Tribune) Richard Rolwing, left, and Arthur Ewenczyk, special assistant United States attorneys, arrive at the federal courthouse Wednesday, Jan. 29, 2020, in Salt Lake City, for the trial of Lev Dermen, who is charged with 10 felonies related to fraud at Washakie Renewable Energy.
The trial’s key witness was Kingston. He acknowledged that he started sending false papers to the government before he met Dermen in late 2011, but Kingston told the jury that Dermen became the driving force in the scheme.
Kingston testified that he and Dermen agreed to ship biofuel across the country and to Panama and back to generate documents to dupe the government into paying the fuel credits. The biofuel was relabeled as cooking grease and then relabeled back to biofuel.
Kingston said Dermen told him where to send his share of the money and insisted that Kingston improve his lifestyle. One of the money laundering counts alleges Dermen’s oil company used $3.1 million of the fraud proceeds to buy Kingston a mansion in Sandy. Another count alleges $3.52 million of the proceeds was used to buy Dermen a house in Huntington Beach, Calif.
Dermen also said he had people working for him in the government who could protect Kingston from prosecution, Kingston testified. Kingston believed that because he saw Dermen surround himself with former and current law enforcement, some of whom served as the defendant’s bodyguards.
FILE - These undated file photos released by the Weber County Sheriff's Office show Jacob Kingston, left, and Isaiah Kingston. (Weber County Sheriff's Office via AP, File)
Much of the defense focused on Kingston and his family. Kingston acknowledged being a member of the Davis County Cooperative Society, also known as the Kingston Group or The Order. Kingston testified that he has three wives. His legal wife, mother and brother have pleaded guilty to crimes, too.
Defense attorney Mark Geragos, in his closing statement, contended prosecutors had put on an excellent case against the Kingston family, but not against his client.
“It’s almost as if [prosecutors] had a script,” Geragos said, “and they had a plan to try the case against the Kingstons, and they forgot the Kingstons aren’t on trial.”
Geragos contended Kingston and other witnesses have changed their stories to receive favorable deals from the government. The lawyer told the jury to disregard the testimony of Zubair Kazi, who did business with Dermen and Kingston and has not been charged with any crimes.
Four money laundering counts originate with a $11.2 million loan Washakie gave Kazi, who testified Dermen instructed him to repay the loan to Dermen rather than to Washakie. Geragos pointed out that a long-running dispute Kazi had with the IRS over $149 million was settled when prosecutors were building their case against Dermen and Washakie.
“Does he have a motive [to lie]?” Geragos said. “He has 149 million motives.”
Geragos will finish his closing argument Thursday.
(Courtesy U.S. District Court for the District of Utah) Lev Dermen, left, stands with Jacob Kingston at a banquet hall in Southern California in 2014. Federal prosecutors say this photo is evidence of how Kingston purchased the 2010 Bugatti Veyron, left, for $1.72 million to give Dermen, and Dermen purchased the Ferrari, right to give to Kingston to launder money from a biofuel fraud. Kingston has pleaded guilty to crimes. Dermen has pleaded not guilty. Behind the men is a sculpture of a lion's head, the animal Dermen associates himself with.
All the witnesses knew Dermen as Levon Termendzhyan until he went to court to change his name in 2017.
The trial is in its seventh week. It began with 12 jurors and four alternates.
One woman was dismissed from the panel after reporting flu symptoms. A man who had been wearing a dust mask in the juror box was dismissed Monday after reporting he had been diagnosed with pneumonia.
Eight men and four women will deliberate.
