Federal prosecutors plan to seek more charges in the Kingston fraud case

SALT LAKE CITY -- Federal prosecutors plan to seek more indictments in a massive fraud case against members of the Kingston polygamous family.

Jail mugshots of the defendants in the Kingston fraud case.

In a court hearing on Tuesday, the U.S. Department of Justice announced plans to seek another indictment against Washakie Renewable Energy CEO Jacob Kingston, his brother, Isaiah, and Turkish businessman Lev Dermen. They also revealed there were other co-conspirators who would likely be indicted.

"We will be seeking a second superseding indictment that will include many more charges and more defendants. We expect to obtain that indictment in mid-January," said Arthur Ewenczyk, an assistant U.S. Attorney.

Government attorneys sought to delay a trial for the three set to begin in February 2019. They argued that they were still going through massive amounts of evidence that could be used against the defendants.

Defense attorneys had heated objections.

"We're ready to go now!" said Mark Geragos, Dermen's attorney. "They can indict him, they can indict his dog for all I care. We’re ready to go to trial now."

Geragos called it a "stall tactic" by the government, which has been investigating the case since 2016.

Marc Agnifilo, who represents Jacob Kingston, said one problem with delaying the trial is his client has been jailed for months now awaiting trial in a tax fraud case.

"We feel like we’re sort of in a box. We have a very complicated case, a case with very serious consequences," he said, adding: "and we have our three respective clients in jail."

U.S. Magistrate Judge Brooke Wells ordered attorneys for all sides to draft some proposed deadlines, but prodded the U.S. government to move faster on its case.

IRS agents take boxes from a businesses tied to the Kingston family on Feb. 10, 2016. (Photo by Ben Winslow, FOX 13 News)

"We’re reaching the end of the investigation and the panoply of charges the defendants and co-defendants will face," said Richard Rolwing, another attorney for the Justice Department. "That will be in shape by the end of the year and brought in mid-January."

Federal prosecutors declined to comment to FOX 13 outside of court on Tuesday about the new charges that are coming against the Kingstons and possibly others.

At Tuesday's court appearance, the Kingston brothers and Dermen were shackled as the latest indictment was read aloud. Jacob and Isaiah Kingston both pleaded not guilty. (Dermen does not face any additional charges under the new indictment.)

The three are accused of working together to have Washakie Renewable Energy file false tax returns to fraudulently obtain renewable fuel tax credits. The U.S. Department of Justice has alleged the scheme sought to bilk taxpayers out of a billion dollars and netted just over $500 million.

The case stems from a 2016 raid by the IRS on businesses linked to the Kingston polygamous family. In civil lawsuits against Jacob Kingston, lawyers have claimed Washakie Renewable Energy produced no biofuels.

In 2016, FOX 13 found Washakie Renewable Energy was a heavy contributor on Utah’s Capitol Hill, making numerous political donations to members of the legislature, the governor, attorney general and Utah Republican Party. The company also advertised heavily at Utah Jazz games and Megaplex movie theaters.

A photo published in 2017 by the Turkish news site SuperHaber.tv, showing Washakie Renewable Energy CEO Jacob Kingston (left) meeting with Turkish President Recep Tayyip Erdoğan. (Image via SuperHaber.tv)

The case has also raised some interesting connections between the Kingstons, who are prominent members of one of Utah’s largest fundamentalist Mormon groups, and Turkish political leaders. Photos published in Turkish news media last year showed Jacob Kingston meeting with President Recep Tayyip Erdoğan and other political leaders when he was pitching business investments there.

The feds have accused the Kingstons and Dermen of stashing millions in bank accounts in Turkey and planning to flee to the country to avoid prosecution.

All three men have denied those accusations.