CEO and CFO of Utah Biodiesel Company and California Businessman Charged in $500 M Fuel Tax Scheme

[nitpicker]

https://www.justice.gov/opa/pr/ceo-and-cfo-utah-biodiesel-company-and-california-businessman-charged-500-million-fuel-tax

Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Friday, August 24, 2018

CEO and CFO of Utah Biodiesel Company and California Businessman Charged in $500 Million Fuel Tax Credit Scheme

A federal grand jury sitting in the District of Utah has returned an indictment, which was unsealed today, charging the CEO and CFO of Washakie Renewable Energy (WRE), a Utah-based biodiesel company, and a California businessman with laundering proceeds of a mail fraud scheme, which obtained over $511 million in renewable fuel tax credits from the Internal Revenue Service (IRS), announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, U.S. Attorney John W. Huber for the District of Utah, Don Fort, Chief of IRS Criminal Investigation and Jessica Taylor, Director of Environmental Protection Agency Criminal Investigation Division.

According to the indictment, Jacob Kingston was Chief Executive Officer and Isaiah Kingston was Chief Financial Officer of WRE and each held a 50% ownership interest in the company. WRE has described itself as the “largest producer of biodiesel and chemicals in the intermountain west.”

Jacob Kingston, Isaiah Kingston, and Lev Aslan Dermen (aka Levon Termendzhyan), owner of California-based fuel company NOIL Energy Group, allegedly schemed to file false claims for renewable fuel tax credits, which caused the IRS to issue over $511 million to WRE. Jacob Kingston is separately charged with filing nine false claims for refund on behalf of WRE in 2013.

The IRS administered tax credits designed to increase the amount of renewable fuel used and produced in the United States. These tax credits were paid by the IRS regardless of whether the taxpayer owed other taxes.

From 2010 through 2016, as part of their fraud to obtain the fuel tax credits, the defendants allegedly created false production records and other paperwork routinely created in qualifying renewable fuel transactions along with other false documents. To make it falsely appear that qualifying fuel transactions were occurring, the defendants rotated products through places in the United States and through at least one foreign country. The defendants also allegedly used “burner phones” and other covert means to communicate during the scheme.

The indictment further charges that the defendants laundered part of the scheme proceeds through a series of financial transactions related to the purchase of a $3 million personal residence for Jacob Kingston. Jacob and Isaiah Kingston are separately alleged to have laundered approximately $1.72 million in scheme proceeds to purchase a 2010 Bugatti Veyron. Jacob Kingston and Lev Aslan Dermen are separately charged with money laundering related to an $11.2 million loan funded by scheme proceeds.
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[Hotler]

1. I wonder how the DOJ found out?

IRS audit? They owed money to somebody and they dropped a dime. Fail to make payments to a politician (s)?