SALT LAKE CITY (AP) — Openings arguments are set Wednesday 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.
Dermen has pleaded not guilty to 10 counts, including money laundering and mail fraud.
Prosecutors allege 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 — including at one point, Lake Elsinore Casino.
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.