The Washakie trial — featuring polygamy, fraud, corruption and all-star lawyers — is one of the strangest Utah has seen
(Courtesy Davis County jail) Lev Aslan Dermen, also known as Levon Termendzhyan, a suspect in a fraud scheme, poses for this mug shot from 2018
Has the most surreal moment of the Lev Aslan Dermen trial been the Utah polygamist who was on the witness stand for a week
, the texts with the Belize government minister who resigned midtrial
, or when a man who owed $32 million walked into the Salt Lake City courtroom?
Feel free to adjudicate that question. Everything else in the trial — which just finished week six — has been. As recently as Thursday, with the jury sent home for a few days, the two sides argued in front of federal Judge Jill Parrish over what the panel would hear on Monday.
U.S. Department of Justice prosecutor Leslie Goemaat
asked Parrish to limit the questions defense attorney Mark Geragos
could ask about the polygamous Davis County Cooperative Society, also known as the Kingston Group or The Order
“I don’t want to hear it,” Geragos said, with his right palm extended toward Goemaat. “I really don’t. She’s annoying.”
Parrish told Geragos to withdraw the statement. He did and apologized.
(Francisco Kjolseth | The Salt Lake Tribune) Defense attorneys Setara Qassim, left, and Mark Geragos arrive for the final day of jury selection at the federal courthouse in Salt Lake City, Wednesday, Jan. 29, 2020, in the trial of Lev Dermen, who is charged with 10 felonies related to fraud at Washakie Renewable Energy.
Geragos and the defense team — Dermen has had at least four lawyers
in the courtroom at all times; so has the prosecution — have been arguing the conspiracy to defraud the government of biofuel tax credits and launder the proceeds was conceived and driven by The Order, particularly Jacob Kingston — Dermen’s former business partner.
Kingston has pleaded guilty to a slew of charges
and agreed to testify against Dermen in exchange for a prison sentence of no more than 30 years. Kingston spent six days on the witness
stand in February. Geragos’ cross-examination included questions about Kingstons’ gigantic family
, including his 100-plus siblings and his three wives.
The prosecution is expected to rest its case in the coming days. As part of the defense, Geragos has told Parrish he plans to recall Kingston to the witness stand, apparently to ask him more questions about his family’s role in the biofuel scheme
involving Kingston’s business, Washakie Renewable Energy.
Dermen is charged with 10 counts related to the fraud, including conspiracy and money laundering. For most of the trial, he has not even been referred to by his legal name.
(Courtesy U.S. District Court for the District of Utah) Lev Dermen, left, stands with Jacob Kingston at a banquet hall in Southern California in 2014. Federal prosecutors say this photo is evidence of how Kingston purchased the 2010 Bugatti Veyron, left, for $1.72 million to give Dermen, and Dermen purchased the Ferrari, right to give to Kingston to launder money from a biofuel fraud. Kingston has pleaded guilty to crimes. Dermen has pleaded not guilty. Behind the men is a sculpture of a lion's head, the animal Dermen associates himself with.
All the witnesses knew Dermen as Levon Termendzhyan until he went to court to change his name in 2017. By then, federal law enforcement suspected he was using his Southern California fuel company to help Kingston launder money fraudulently taken from a biofuel program created by Congress.
Washakie was supposed to be manufacturing biofuel
from used cooking grease and other organic material, tapping into a federal program that paid up to $1 per gallon to offset the cost. Kingston has admitted his company manufactured little biofuel and more often falsified papers to make already-made biodiesel look like new product. Prosecutors have said Washakie stole $471 million from the government.
A variety of people who had business dealings with Dermen and Kingston have testified about their interactions and to authenticate gigabytes worth of financial records prosecutors say demonstrate the scheme. Some of the witnesses, like Kingston, have admitted to crimes themselves
. Others have said they tried to conduct honest business with Kingston or Dermen and are owed money.
One of those is Shimon Katz. He is the chief financial officer of a company called LifeTree Trading.
(Leah Hogsten | Tribune file photo) WRE or Washakie Renewable Energy held an open house in Plymouth on Thursday, September 1, 2011 to showcase its new production facility.
In May 2014, it agreed to sell $90 million worth of biofuel to Washakie, Katz explained to the jury. The shipments were to be made in thirds.
Washakie didn’t pay for the first shipment. LifeTree halted future deliveries and filed a lawsuit. It won a $32 million judgment
against Washakie. Katz said his company has never been able to collect.
Prosecutors have contended Dermen was aware of the fraud at Washakie and helped direct it. Katz testified about a meeting he had with Dermen in July 2014 at a Beverly Hills, Calif., office. Katz testified he asked Dermen to help Washakie, often known by the acronym WRE, get a line of credit so it could pay LifeTree.
“He said, ‘Oh, WRE. That’s one of my companies,’” Katz testified.
Dermen said Katz should continue talking to Kingston about finding the money, Katz told the jury. Under cross-examination from Geragos, Katz agreed Dermen did not seem to know the particulars of the Washakie deal with LifeTree.
(Francisco Kjolseth | The Salt Lake Tribune) IRS Special Agent Stephen Washburn, left, Richard Rolwing, center, and Arthur Ewenczyk, special assistant United States attorneys, arrive at the federal courthouse Wednesday, Jan. 29, 2020, in Salt Lake City, for the trial of Lev Dermen, who is charged with 10 felonies related to fraud at Washakie Renewable Energy.
IRS Special Agent Stephen Washburn testified most of last week. He explained to the jury how he traced money from the U.S. treasury to Washakie, and from there to a string of domestic and foreign companies and into businesses and accounts controlled by Dermen.
Washburn also tried to find some of the assets he believes were purchased with the fraud proceeds, including a $1.8 million 2010 Bugatti
. Kingston has testified he bought the sports car for Dermen. Washburn said he conducted surveillance on Dermen in the Los Angeles area to find the car, but no one has been able to locate it.
When it was Geragos’ turn to ask questions, he prodded Washburn on Kingston’s truthfulness.
“Did you ever review the things he was telling you and see whether his story changed over time?” Geragos asked.
“I did not,” Washburn replied.
The trial has been slowed by arguments among the lawyers, winter snowstorms that kept jurors
and the judge from reaching court on time, and by questions about the jurors. Late in February, according to discussions that happened in the courtroom among Parrish and the attorneys, someone hung a magazine advertisement in the juror room.
Parrish halted testimony for two days and closed the courtroom to the public so she and the lawyers could question the jurors about the ad and whether it had instilled any kind of bias in them. When the courtroom opened again, defense attorney Linda Moreno told Parrish that one juror had been untruthful and should be removed.
The defense also filed a motion for mistrial. Parrish denied both motions. The juror has remained and the trial is continuing.
Dermen, 53, was clean shaven when the trial began. Now he’s sporting a salt-and-pepper beard and mustache. He sits at the rear defense table and often seems amused. At one point during testimony Thursday, he put his arm around his local attorney, Jon Williams and whispered into his ear with a smile.
The trial has attracted international attention, at least for a while. Journalists from Turkey and Belize were in the courtroom for the first few weeks to hear about how Washakie laundered or tried to launder proceeds to those two countries
, but those reporters have since gone home.
(Image via Belize Ministry of National Security) Belize Minister of National Security John B. Saldivar inspects security facilities according to a press release Dec. 14, 2019.
Journalists working for Belize news sites got to hear about Kingston’s and Dermen’s interactions with that country’s security minister, John Saldivar. He resigned Feb. 13 — the same week Kingston testified about paying him $50,000
to aid political campaigns. Text messages corroborated Kingston’s statements. Saldivar had been in line to become Belize’s next prime minister.
The trial started with 12 jurors and four alternates. One of those on the panel reported having flu symptoms this week and was dismissed. Nine men and six women remain, and they’ll be back for more witness testimony on Monday.