A grand jury has returned a new indictment against two brothers — members of the polygamous Kingston family — and a third man accused of engaging in a biofuel tax scam and laundering the proceeds.
Jacob and Isaiah Kingston and Lev Aslan Dermen, commonly known as Levon Termendzhyan, were first indicted on 15 counts in August in what prosecutors say was a scheme involving the brothers’ company, Washakie Renewable Energy. On Wednesday, a grand jury in Salt Lake City returned a superseding indictment, which adds new counts or changes old ones.
In the new version, Jacob Kingston is charged with 25 counts of filing false returns with the IRS and money laundering. The new indictment might have the greatest impact on Isaiah Kingston, who previously faced only one count of money laundering. The superseding indictment charges him with six counts of money laundering and alleges Isaiah Kingston transferred or deposited proceeds of the biofuels fraud.
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 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, Aug. 29, 2018. Kingston's attorney said the prosecutor's allegations are false hearsay. (Weber County Sheriff's Office via AP, File)
Termendzhyan was indicted Wednesday on four counts of money laundering. In an email to The Salt Lake Tribune, one of his attorneys, Mark Geragos, pointed out no new counts were added to the indictment against his client.
“It’s becoming increasingly obvious that they have no case,” Geragos wrote.
Superseding indictments are often used by prosecutors to charge defendants with newly discovered crimes, to clarify the allegations or to shore up the prosecution’s case.
All three defendants previously pleaded not guilty. A trial is scheduled for Feb. 11 in federal court in Salt Lake City. It was unclear Tuesday whether the new indictment would change that schedule. Defense attorneys for Jacob and Isaiah Kingston did not return requests for comment Tuesday.
There are still no charges alleging bribery or obstruction of justice abroad or in Utah. Previous court documents and other public records have alleged Jacob Kingston sought to gain political influence in Turkey, that Termendzhyan had bribed or corrupted federal and local law enforcement in California and the Kingston brothers were tipped off to a 2016 federal raid of their offices in South Salt Lake.
Instead, the new indictment alleges more crimes committed within the biofuels fraud. Washakie Renewable Energy was supposed to be manufacturing biofuels out of materials such as cooking grease and agricultural byproducts and converting them to biodiesel. The U.S. Treasury would then provide a tax credit for every gallon produced.
(Photo by Ihlas Haber Ajansı published with its permission.) In this September 2017 photo, Jacob Ortell Kingston, left, the chief executive of Washakie Renewable Energy, meets with Sezgin Baran Korkmaz, chief executive of SBK Holding, Turkish President Recep Tayyip Erdoğan and Caglar Sendil, the president of Mega Varlik Corporation. According to the Turkish news agency Ihlas Haber Ajansı, the four discussed Washakie and SBK's planned investments in Turkey. In August of 2018, Kingston was indicted by the U.S. Department of Justice on charges of fraud and money laundering. His brother Isaiah Kingston was indicted for money laundering.
Prosecutors allege the company was actually buying biofuels from other providers, doctoring papers to make it look as though Washakie Renewable Energy made the fuel and then collecting the tax credits from the IRS. The indictments allege the money was then used to make investments in California and Turkey, purchase Jacob Kingston’s home in Sandy, Utah, and buy a 2010 Bugatti Veyron — a French sports car with a sticker price upward of $1.7 million.
The Kingston brothers are members of the Davis County Cooperative Society, also known as the Kingston Group. It is a fundamentalist Mormon community that practices polygamy and whose members consecrate their assets to live in a communal fashion. Prosecutors cited examples in which Kingston Group members sought to evade and deceive law enforcement as reasons to detain Jacob and Isaiah Kingston until trial.
The Kingston brothers are being held in the Weber County jail. Termendzhyan is being held in the Davis County jail.
