Two members of the prominent polygamous Kingston Group have been indicted for their part in an alleged $500 million fuel tax-credit scheme, according to documents unsealed Friday.

Washakie Renewable Energy CEO Jacob and CFO Isaiah Kingston, as well as Lev Aslan Dermen (also known as Levon Termendzhyan), are accused of gaming an IRS tax-credit program that gave payouts to companies that produced renewable energy. The men allegedly did so through false filings and money laundering, according to a news release from the Department of Justice.

Washakie Renewable Energy LLC is operated by and partly funded through the Kingston Group, a Utah-based polygamous church with fundamentalist Mormon beliefs. The church is also known as the Davis County Cooperative Society and the Latter Day Church of Christ. Jacob and Isaiah’s father, John Daniel Kingston, is the patriarch of the group. (The Church of Jesus Christ of Latter-day Saints no longer endorses polygamy.)

Dermen controlled Noil Energy Group Inc. and worked with the California-based SBK Holdings USA Inc., which the Kingstons allegedly funneled money through as part of the scheme.

Jacob and Isaiah Kingston and Dermen allegedly falsified production records and other documents, which they submitted to the IRS for refunds from 2010 to 2016.

To encourage the production and use of biofuels in the United States, the agency gave companies credits of $1 or 50 cents per gallon of renewable fuels produced. The IRS gave more than $511 million in refunds to Washakie, according to the Justice Department.

Washakie Renewable Energy, which is based in Salt Lake City and has a production facility in Box Elder County, billed itself at the time as the “largest producer of biodiesel and chemicals in the Intermountain West," according to the release, but the indictment says the company wasn’t producing much fuel.

Instead, it says, company officials bought, sold or made others purchase fuels and biodiesel products, which were then rotated or otherwise moved around through other companies in the country and at least one in Panama to keep up the appearance that Washakie was producing fuel and, thus, eligible for the credits.

Money obtained in the alleged scheme was used to buy Jacob Kingston’s personal home, a $3 million, 14,000-square-foot mansion in Sandy, which federal authorities raided in 2016, alongside other Kingston Group-related properties. No one was arrested then, and authorities didn’t comment on the raids.

A year before the raids, the company agreed to pay a $3 million fine to resolve allegations that it had sold credits for renewable fuels it hadn’t produced. The company said that instance was a mistake due to a “misinterpretation” of the law.

The unsealed indictment said money from the fraud also helped raise funds for the Kingston brothers to buy a 2010 Bugatti Veyron for $1.7 million.

According to the indictment, the Kingstons and Dermen used “burner phones” to communicate about the alleged fraud.

Jacob and Isaiah Kingston are in federal custody and have pleaded not guilty.

If convicted, Jacob Kingston faces a maximum of 87 years in prison. His brother and Dermen could be sentenced to a maximum 20 years. The court also intends to take back all money used in the alleged scheme, the Sandy mansion and the Bugatti.

Representatives from Washakie and the Kingston Group didn’t immediately respond to The Salt Lake Tribune’s request for comment Friday evening.