California Businessman Convicted Of $1 Bln Biodiesel Tax Fraud
The U.S. Department of Justice or DoJ announced that a California businessman has been convicted of a $1 billion renewable fuel tax credit fraud scheme.
In a statement, the DoJ said a federal jury in Salt Lake City, Utah, found Lev Aslan Dermen, also known as Levon Termendzhyan, guilty of criminal charges related to the scheme.
The Government had established the biofuel tax credit program to promote a clean fuel alternative to traditional fuel options.
Dermen, through his fuel company Noil Energy Group, allegedly conspired with Kingston family, the owners of Utah-based biodiesel company Washakie Renewable Energy, to corrupt the biofuel tax credit program. They fraudulently claimed more than $1 billion in renewable fuel tax credits.
From 2010 to 2016, Dermen conspired with Washakie Chief Executive Officer Jacob Kingston, his brother, Chief Financial Officer Isaiah Kingston, their mother, Rachel Kingston, and Jacob Kingston’s wife, Sally.
As part of their scheme, Dermen and Jacob Kingston shipped millions of gallons of biodiesel within the U.S. and from the U.S. to foreign countries and back again. This created the appearance that qualifying renewable fuel was being produced and sold. The coconspirators also cycled more than $3 billion through multiple bank accounts.
As a result of the fraudulent claims, the IRS paid more than $511 million to Washakie and the Kingstons that was distributed between them and Dermen.
Four members of Kingston Family, including the CEO and CFO of Washakie, each pleaded guilty on July 19, 2019.
Jacob Kingston faces a maximum of thirty years in prison. Isaiah Kingston faces a maximum of 20 years in prison, while Rachel and Sally Kingston each face a maximum of 15 years. Sentencing has not yet been scheduled.
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