SALT LAKE CITY — A California businessman says trying him alongside four co-defendants tied to the Kingston polygamist group would wrongly brand him as a close confidant of the larger organization.
But U.S. District Judge Jill Parrish on Wednesday rejected Lev Aslan Dermen’s request to be tried separately from four members of the Kingston clan, which is also known as the Davis County Cooperative Society, or the Order.
Charged in a $511 million fraud scheme, Dermen is set to go on trial July 29 before Parrish with brothers Jacob and Isaiah Kingston, their mother, Rachel Ann Kingston, and Jacob’s wife, Sally Louise Kingston.
A federal indictment alleges the five conspired to defraud the federal government of refundable biofuels tax credits received by the Kingston brothers’ company, Washakie Renewable Energy.
Prosecutors say Dermen participated in the alleged conspiracy with his own corporate resources in California helping to funnel transactions involving biofuels shipments.
But attorneys for Dermen, 52, who has been held without bail in the Davis County Jail since September 2018, argued their client would suffer “actual prejudice” before a jury in a combined trial.
That’s because he is not a member of the Order and he is not accused of obstructing justice — attempting to intimidate witnesses — as are the Kingston brothers.
Parrish, however, in her memorandum decision, said Dermen’s prejudice argument fails because “the indictment clearly alleges that the (co-conspirators) used Order-related entities in furtherance of the conspiracy.”
Whether he is tried alone or with the others, Dermen “cannot avoid the presentation of Order-related evidence, especially when those entities played such an integral role in the alleged conspiracy,” Parrish wrote.
She further pointed out that the government’s evidence indicates Dermen “was not merely a siloed co-conspirator responsible for one component of the conspiracy in Los Angeles, but rather that he had full knowledge of the Order-related entities’ participation in the scheme, that he traveled to Utah in furtherance of the scheme, and that he even met the Order’s leadership.”
The indictments followed years of investigation that included warrant searches in 2016 at several locations around the Salt Lake Valley.
Warrants were served on Washakie’s offices and those of a Washakie affiliate, United Fuel Supply. Investigators also searched three other business buildings and a Taylorsville home thought to have connections to the Kingston defendants.
A 46-count, 60-page indictment said the five schemed to defraud the government of $1.1 billion by faking more than 1 billion gallons of biofuels transactions to obtain renewable energy tax credits from 2011 through 2015.
The defendants received $511 million before the alleged scheme was stopped, according to the indictment.
Jacob Kingston, Washakie’s CEO, faces 42 charges of tax fraud, money laundering, obstruction of justice and targeting of witnesses. Isaiah, the CFO, faces 20 charges.
Dermen, whom prosecutors allege used several companies he controls in the United States and Turkey to launder money with the Kingstons, faces nine charges.