28 Jan 2020
When the trial for the last of five defendants in the Washakie Renewable Energy case starts this week, jurors can expect to hear about a Utah polygamous sect, bribery, and how proceeds of a $511 million biofuel fraud were laundered into ritzy homes, expensive cars and Turkish industries.
Lev Aslan Dermen is the only defendant who has maintained his innocence. The others — all affiliated with the Davis County Cooperative Society, also known as the polygamous Kingston Group or “The Order” — pleaded guilty last year and are expected to testify against Dermen.
The criminal investigation took federal agents far beyond Utah. Journalists from Turkey are coming to Salt Lake City to hear how money may have been laundered into that country’s pharmaceutical industry. Reporters from Belize are monitoring the trial to hear how an official there might have been bribed.
Here’s a primer on the trial, which begins Monday in federal court in Salt Lake City with jury selection, followed by opening arguments Tuesday or Wednesday.
What are the charges?
Dermen is charged with 10 counts: one count of conspiracy to commit mail fraud, one count of conspiracy to commit money laundering and eight counts of money laundering. He faces up to 180 years in prison.
Who is Dermen?
He was previously named Levon Termendzhyan. He immigrated from Armenia in 1980 at age 14, according to a defense filing, and is a U.S. citizen.
Dermen owned a chain of Los Angeles-area gas stations under the name Noil Energy. “Noil” is “lion” spelled backward and represents one example of Dermen’s identification with the big cat. Some of Dermen’s other businesses have had the word “lion” in them. His chosen middle name, “Aslan,” is Turkish for lion.
Dermen has been tried before. He was acquitted of assaulting an undercover police officer. He also was cleared in a California trial accusing him of defrauding consumers who bought gas at service stations he owns in the Los Angeles area.
What is he accused of doing?
The charges against him in Salt Lake City stem from a scheme in which Washakie defrauded a federal biofuel program. Instead of producing their own biodiesel from cornstalks, cooking grease and other organics, the four defendants who pleaded guilty admit they were buying biofuel from elsewhere. They then submitted that purchased fuel for a tax credit. The government has said the fraud accumulated $511 million.
Prosecutors allege Dermen bought biofuel from Washakie at below-market rates and sold it at his gas stations. The ringleader was thought to be Washakie CEO Jacob Kingston. Then, after Kingston pleaded guilty and began cooperating, prosecutors developed a new theory.
They now say Dermen drove the fraud, telling Kingston where to buy biodiesel and how to transport it. Prosecutors also plan to show evidence Dermen told Kingston to launder the money by buying homes and cars for each other — the government says Kingston paid $1.72 million to give Dermen a 2010 Bugatti Veyron, a French sports car — and by sending money to businesses and accounts in Turkey, Luxembourg and Belize.
Dermen, according to prosecutors and a plea agreement signed by Kingston, also offered to protect Kingston from law enforcement by paying bribes or influencing a variety of public officials under an umbrella of protection he referred to as “Grandpa.” Court documents describe an Immigration and Customs Enforcement agent, who smuggled a Mexican national into the United States at Dermen’s behest, and a former Glendale, Calif., police officer, who pleaded guilty to corruption charges, as cooperating witnesses in Dermen’s case. The defendant also is suspected of bribing a Belize civil servant to help him obtain a passport and a gambling license.
By Nate Carlisle, The Salt Lake Tribune, 27 January 2020
Read more at The Salt Lake Tribune
RiskScreen: Eliminating Financial Crime with Smart Technology
Advance your CPD minutes for this content, by signing up and using the CPD WalletFREE CPD Wallet