A global biofuels trading company is fighting to collect a $32 million civil judgment awarded by a New York jury against Washakie Renewable Energy, which operates a large production complex in Box Elder County.
In a pair of U.S. District Court suits filed in March in Salt Lake City, attorneys for Singapore-based LifeTree Trading are pursuing asset information from Washakie CEO Jacob Kingston to compel payment of the debt.
A federal jury in New York last November awarded $25.3 million in damages to LifeTree after Washakie and Kingston defaulted on a $91.3 million contract to buy 90,000 metric tons of biodiesel fuel. The judgment has since grown with interest and other costs.
On May 31, a judge refused Kingston’s effort to quash a subpoena aimed at opening his assets to legal discovery.
LifeTree attorneys said in court documents they are trying to, among other things, “recover a significant fraudulent conveyance,” a $9.9 million asset transfer from Washakie to Kingston.
“Washakie has been used by Kingston to perpetrate fraud by falsely reporting to be a large and successful producer of biofuels,” said a document filed by LifeTree lawyer Michael Zundel.
“Furthermore, Kingston treats Washakie as his personal piggy bank, commingling his own funds with Washakie’s and selectively transferring personal funds, in very large amounts, in and out of Washakie’s bank and other financial accounts as the need arises, and in order to defraud third-parties, such as LifeTree.”
Zundel said LifeTree should be granted a writ of attachment against Kingston’s personal assets to secure payment of the $32 million judgment.
Efforts to contact Gabriel White, an attorney representing Kingston in the case, were not immediately successful
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Jacob Kingston and his brother Isaiah founded Washakie in 2007. The company is based in Salt Lake City and has its production operations near Plymouth in Box Elder County.
Washakie converts seed oil and used cooking fuel into biofuel additives federally mandated for gasoline and diesel.
The brothers are sons of John Daniel Kingston, a polygamist patriarch of the Kingston Group, also known as the Davis County Cooperative Society. The group has numerous business holdings in Utah and elsewhere.
LifeTree’s dispute with Washakie and Kingston began in 2014 soon after the contract was signed when Washakie told the trading company it had not been able to secure a line of credit to pay for the shipment of biofuels.
LifeTree had bought biofuels from Argentina for the first of three shipments, 30,000 metric tons, and said it quickly and steadily suffered significant costs and losses from holding the materials pending payment and shipment.
Washakie never came up with the funds, and LifeTree said it suffered “devastating” damage to its business.
The contract specified a fixed price for the biofuels, LifeTree noted. As the line of credit delay dragged on, fuels prices plunged.
“Washakie locked in the purchase price solely to speculate on the market, setting LifeTree up to take the fall if the price declined below the contract price,” LifeTree documents said.
In the New York suit, LifeTree sought $61 million in damages plus $180 million in punitive damages.
Washakie attorney Leodis Matthews argued in the trial that LifeTree had not sufficiently documented claimed losses.
“We have nothing — no proof of any damages,” Matthews said, according to the trial transcript.
“Our position is that they (LifeTree) were playing the market,” Matthews said. “This was a buy-and-sell operation.”
In 2015, the Justice Department found that Washakie falsely claimed federal renewable energy credits in 2010. The company agreed to pay a $3 million settlement.