Last week, five people were sentenced for their roles in a $1 billion biofuel tax conspiracy that was truly a family affair. From 2010 to 2018, 56-year-old Lev Dermen, conspired with brothers Jacob and Isaiah Kingston, their nearly 70-year-old mother, Rachel Kingston and Jacob's wife Sally.
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The confederates worked together to claim more than $1 billion in fraudulent refundable renewable fuel tax credits. Jacob and Isaiah owned Washakie Renewable Energy, a biodiesel company in Utah that received more than $511 million in credits paid out by the IRS.
For more than eight years, the co-conspirators pulled multiple schemes. For example, Washakie bought biodiesel from the East Coast, from a company that already claimed the renewable fuel tax credit, and exported it to foreign countries using forged transport documents as product produced in the Utah plant. The company also used falsified paperwork to disguise imported biodiesel as feedstock and then filed fake tax documents to make fraudulent claims about in-house biodiesel production for IRS biofuel tax credits.
Another scheme saw the cohorts purchase millions of gallons of biodiesel and rotate it though the U.S. shipping system to create the appearance that qualifying fuel was being produced and sold by Washakie.
Dermen told the Kingston family that he could protect them with his "umbrella" of corrupt law enforcement, keeping them immune from criminal prosecution. He lied.
The money from the scheme was huge and the partners spent it lavishly, including a 150-foot named "Queen Anne," land in Belize for a casino, a 2010 Bugatti Veyron, a chrome Lamborghini and a gold Ferrari. They also acquired multiple mansions.
Well, it all came crumbling down and now Dermen and the Kingstons are set to do the time for their crimes. Dermen was sentenced to 40 years in prison and ordered to pay more than $442 million in restitution. He also faces a money judgment of more than $181 million.
Jacob Kingston, CEO of the plant, received 18 years and was ordered to pay $511 million in restitution and has a $338 million money judgment against him. His wife was sentenced to six years. His brother, Isaiah, faces 12 years. The former CFO also has to pay $511 million in restitution to the IRS.
Finally, Rachel, the mother, was sentenced to seven years in prison. The mother and the wife were instrumental in creating the forged documents.
Millions in proceeds have already been recovered and the assets, many of which were overseas, have been seized.