SALT LAKE CITY — A judge Friday sentenced a businessman that stole $511 million from a government biofuel program to 18 years in prison.
Jacob O. Kingston, 46, will receive credit for the 4 ½ years he’s been in custody. He was the chief executive of Washakie Renewable Energy and is the fourth member of his family to be sentenced in the scheme.
Another co-defendant, who is not kin to the others, Lev Dermen, was sentenced Friday afternoon to 40 years in prison.
“I want to apologize sincerely to my family for the hurt that I caused,” Kingston told federal Judge Jill Parrish. “I even used my religion to justify things that I knew just was not right and part of that was committing fraud.”
Washakie promoted itself on television and other advertisements as taking used cooking grease, cornstalks and other biological materials and turning them into biodiesel at its plant . In reality, according to evidence in the case, Washakie made little fuel.
Instead, members of the polygamous Kingston family committed forgeries and frauds to collect a federal tax credit meant to stimulate biodiesel production. Washakie applied for more than $1 billion in credits and received about half that.
“I don’t believe it’s a faceless victim,” Parrish said. “The victim is every single individual in the country who is a taxpaying citizen.”
The U.S. government is trying to recoup the losses by seizing Washakie assets, as well as properties it believes was purchased with money laundered through the Kingston polygamous sect, also known as The Order and a related entity called the Davis County Cooperative Society.
Kingston’s legal wife, Sally Kingston, received a six year sentence on Wednesday. Thursday, Jacob Kingston’s brother Isiah Kingston was sentenced to 12 years; the two men’s mother, Rachel Kingston, received a seven year prison sentence.
All four Kingstons pleaded guilty in 2019 to crimes related to the fraud. Jacob and Isaiah Kingston testified against Dermen at his 2020 trial.
A Turkish businessman accused of benefiting from the scheme, Sezgin Baran Korkmaz, has pleaded not guilty and is scheduled to go to trial in October. Jacob Kingston is to testify against him, too.
Prosecutors asked for a life sentence for Dermen. Jacob Kingston had already stolen about $70 million in fuel credits before he met Dermen.
Dermen, 57, who also has been known as Levon Termendzhyan, owned a chain of Southern California gas stations under the name NOIL Energy. When Dermen learned of the scheme, according to evidence at this trial, he pushed to be a part of it and for Washakie to expand it.
“Mr. Dermen preyed on the Kingstons,” federal prosecutor Richard Rolwing told the judge. “He saw his mark.”
A Salt Lake City jury in March 2020 convicted Dermen of 10 counts, including conspiracy, mail fraud and money laundering.
When it was time to address the judge, Dermen spoke for about 20 minutes. He walked the court through what he says occurred, arguing he had contracts with Washakie to sell product in multiple countries and Jacob Kingston broke the contracts.
Jacob Kingston then told federal agents things pointing the finger at Dermen, he contended. Dermen also claimed an agent from the U.S. Department of Agriculture in 2012 asked him to inform on the Kingston family. When Dermen refused, he said, the agent told him he’d set him up.
“I know you’re missing something,” Dermen told Judge Parrish. “Tell me what you’re missing.”
Parrish explained it was the jury who tried the case; not her. She explained how his attorney can appeal the verdict.
