Utah polygamist clan members sentenced to federal prison for billion $$ tax fraud scheme

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WASHINGTON — Five people, including four Utah family members associated with a polygamous clan, were sentenced to federal prison last week for a billion-dollar tax fraud scheme associated with their biofuel company, according to a statement released April 7.

Prison sentences ranged between six and 40 years.

Testimony in the 2020 trial for Lev Aslan Dermen, a Los Angeles businessman, and court documents in the case support that Dermen conspired with Jacob and Sally Kingston, Isaiah Kingston and Rachel Kingston as the Utah family's company fraudulently claimed over $1 billion from "refundable renewable fuel tax credits."

Washakie Renewable Energy, the company owned by brothers Jacob and Isaiah Kingston, received over $511 million in credits from the IRS — which was distributed between Dermen, the brothers, their mother and Jacob Kingston's wife.

The Kingstons are members of the Davis County Cooperative Society, or the Kingston Order, which practices polygamy.

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Jacob Kingston, 46, was ordered to pay $511 million to the IRS, in addition to paying $338 million imposed by the court, after pleading guilty in July 2019. A statement from the U.S. Department of Justice said he admitted to mail fraud, filing false claims with the IRS, money laundering paired with conspiracy to commit money laundering, obstruction by destroying records paired with conspiracy to destroy records, and witness tampering.

He was sentenced to 18 years in federal prison.

Isaiah Kingston, 42, was also ordered to pay back the $511 million to the IRS and pleaded guilty to similar crimes including conspiracy to commit mail fraud, assisting in filing false tax returns, money laundering and conspiracy to commit money laundering, and obstruction by concealing and destroying records and conspiracy to commit obstruction. He was sentenced to 12 years in federal prison.

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Dermen and the Kingstons made some lavish purchases with the money, including a mansion in Sandy for Jacob and Sally Kingston.

Dermen's associates in Turkey rebuilt a 150-foot yacht that was seized by the government in Lebanon and sold for $10.1 million. Dermen used money sent by the Kingstons to purchase land in Belize to build a casino.

Jacob Kingston purchased a $1.8 million 2010 Bugatti Veyron, an elite French sports car, for Dermen as a "gift," and Dermen "gifted" Jacob Kingston a chrome Lamborghini and a gold Ferrari.

Over $35 million was sent by the Kingstons to their extended family.

The U.S. government is seeking forfeiture of multiple properties purchased with the laundered money, including a mansion owned by Dermen in Huntington Beach, California.

Trina A. Higgins, U.S. Attorney for the District of Utah, said her office will continue working on the case as it seeks forfeiture of assets and to recoup losses from the tax fraud

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