Millcreek • The patient had been sedated, and that’s when the anesthesiologist decided to ask David Petersen something.

“He’s like, ‘Hey, your building is in the news,’” Petersen, an eye surgeon, recalled Thursday. “Are you a part of that whole thing?”

That “whole thing” is the fraud the owners of Washakie Renewable Energy have admitted to while pleading guilty in federal court. Prosecutors say the company wrongly obtained $511 million from a government biofuels program and laundered it through businesses and real estate, including the purchase of the medical building at 4400 S. 700 East where Petersen leases space for his practice. The U.S. Department of Justice has filed a notice it plans to seize the building to help reimburse taxpayers.

There’s no allegation the ophthalmologists, optometrists and opticians in the building had any role in the crimes, but since The Salt Lake Tribune reported Monday on the government’s plans to take the real estate, staffers in the eye practices say they have received calls from concerned patients. They also worry that patients may not be calling them for appointments at all.

The Washakie owners are members of the polygamous sect known as the Kingston Group, or the Davis County Cooperative Society and the Latter Day Church of Christ. The eye care professionals and their staff say they’ve also fielded questions on whether they and their practices are part of the sect, too. They have tried to assure everyone they are not.

“We’re just innocent bystanders,” said Kevin Charlton, one of the physicians at Rocky Mountain Eye Care Associates, which leases space in the building.

(Francisco Kjolseth | The Salt Lake Tribune) Rocky Mountain Eye Care Associates' David Petersen talks with office manager Donna Hoppe.
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Janet Gardner, who works in billing for Rocky Mountain Eye Care Associates, said Monday she received a phone call from a patient who asked if she had read The Tribune that morning.

“She had some kind of surgery coming up with Dr. Charlton,” Gardner said, “and she was worried he would not be in business.”

Donna Hoppe, office manager at Rocky Mountain Eye Care Associates, said she fielded four similar calls Monday and Tuesday. Staffers also worry that physicians elsewhere may no longer be referring patients to them.

“We live by referrals,” said Petersen, whose specialty at Rocky Mountain Eye Care Associates is correcting misaligned eyes. “Ninety percent of the patients I see here have been referred.”

The medical offices at 4400 S. 700 East are independent eye care practices, some of which can trace their beginnings to before the building was constructed in the mid-1980s. When the building came up for sale in 2013, the tenants banded together and put in a bid.

(Francisco Kjolseth | The Salt Lake Tribune) Janet Gardner, left, a billing specialist for Rocky Mountain Eye Care Associates, talks about a recent concerned customer call when news broke about the building's landlord, members of the polygamous Kingston Group, pleading guilty to fraud. She is joined by manager Donna Hoppe and physician Leigh Wilkinson.
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Kari Rasmussen, practice administrator at Rocky Mountain Retina Consultants, said their offer was $2.3 million — close to market value. Members of the Kingston family offered more, paying $3.1 million cash, Rasmussen said. The new owners then incorporated a company that is the legal owner of the property and gave that company a name similar to many of the eye practices, calling it Rocky Mountain Eye Center LLC. The building owners did not return messages seeking comment.

No federal court documents in the fraud specifically discuss the building or Rocky Mountain Eye Center LLC, but in their plea agreements, Washakie owners Jacob and Isaiah Kingston have acknowledged laundering money through other businesses and using inflated invoices to do so. Other businesses, homes and agricultural property with no direct ties to Washakie, but whose purchases were financed by other companies with links to the Kingston Group, also have appeared on the list of properties to be seized.

Petersen said he paid attention to news of Washakie for years, wondering what would happen to his eye practice if that company’s problems created some for the larger sect.

“It certainly made us nervous,” Petersen said.

The owners of the eye center will be allowed to make a defense for keeping the building. If the government does take the property, the eye professionals interviewed Thursday said they have been told by their attorneys that existing leases would be honored. The professionals have not heard from the feds.

Petersen tries to see the government’s potential seizure of the building as an opportunity.

“We’re still hoping we can acquire it,” Petersen said, “which is what we always wanted.”