The defendants accused in a $511 million fraud scheme destroyed evidence in anticipation of a 2016 raid on a home and businesses with ties to a polygamous sect, prosecutors said in court papers unsealed Tuesday.
That raid by FBI and IRS agents targeted a home and offices of Kingston Group members. Federal prosecutors wrote that shelves had been emptied and computer hard drives had been wiped before agents arrived.
“The investigation has not revealed how the defendants learned that the government obtained sealed search warrants,” the court document reads, “but multiple witnesses have stated that defendants Jacob Kingston and Lev Aslan Dermen talked of having law enforcement contacts willing to provide them with information about ongoing covert investigations.”
Tuesday’s motion also alleges efforts to intimidate witnesses and bribe law enforcement and that the defendants had plans to flee to Turkey.
Kingston, his brother Isaiah Kingston and Dermen were indicted earlier this month on multiple counts of fraud related to a biofuel company, Washakie Renewable Energy, which the brothers ran. The motion unsealed Tuesday was the government’s argument for why the defendants should remain in jail pending trial. Prosecutors argue the defendants have a history of destroying evidence along with considerable assets and ties to Turkey.
Jacob and Isaiah Kingston are due to appear Wednesday in federal court in Salt Lake City. Isaiah Kingston’s lawyer, Scott C. Williams, said he will ask a judge to release his client until trial. Williams said his client has no criminal record and is charged with white-collar offenses — money laundering — that he allegedly committed in 2013.
The government’s motion, Williams said, talks mostly about Jacob Kingston.
“There’s virtually no evidence in the government’s pleading that goes to Isaiah,” Williams said.
The docket does not list an attorney for Jacob Kingston or Dermen.
The motion also discusses the polygamous sect to which the Kingstons belong — the Davis County Cooperative Society. It also is known as the Kingston Group.
The motion mentions stories from witnesses who describe sect leaders as sending some families suspected of crimes into hiding in homes in Park City and Colorado.
Lu Ann Cooper, a former member of the sect who helps people after they leave the group, said she wasn’t surprised to hear the defendants might have been tipped about the February 2016 raid. Cooper said she does not view the charges against Jacob and Isaiah Kingston in isolation, and the missing evidence is discouraging to people like her who contend the Kingston Group is a criminal organization.
“It’s been frustrating watching the Kingstons get away with as much as they do,” Cooper said, “and I hope they don’t get away with it this time.”
A spokesman for the Davis County Cooperative Society has said members are encouraged to follow the law.
The motion also describes the Kingston brothers as trying to pay bribes to what they thought were intermediaries who would intimidate witnesses and have officials at the U.S. Department of Justice destroy evidence. The intermediaries were really government informants, according to the motion.
One section of the government’s motion relays what witnesses said they heard the defendants say about Turkey. The witnesses reported the brothers claimed to have homes in Turkey and would flee to that country if they were at risk of going to jail in the United States.
The witnesses also reported the Kingstons claimed not to need passports to travel to Turkey because of all the money and influence they have there. Prosecutors point to a news release issued by a Turkish government agency showing Washakie and other energy firms combined for a $950 million investment in that country.
Jacob Kingston was arrested Aug. 23 at Salt Lake City International Airport trying to travel to Turkey with his wife and some of his children, the motion says.
The defendants were indicted on counts of wire, mail and bank fraud, as well as theft and money laundering. They are not charged with any counts of bribery, witness tampering or obstruction of justice.
If convicted, Jacob Kingston faces a maximum of 87 years in prison. His brother and Dermen could be sentenced to up to 20 years.
For a stretch in 2014 and 2015, Washakie Renewable Energy was one of the highest-profile companies in Utah. It advertised heavily during Utah Jazz games, gave college scholarships and donated $190,000 to Utah politicians and political committees.
The company was supposed to be manufacturing biofuels from grease, animal fat and other oil wastes at its production facility in Box Elder County, about 100 miles north of Salt Lake City. Under a program created by Congress, Washakie collected $2.2 million in tax credits for that manufacturing.
Then, in 2015, Washakie agreed to pay $3 million in fines to the Environmental Protection Agency, which administered the program. The EPA said Washakie was actually buying biofuel, not manufacturing it.
In 2016, a former employee told The Salt Lake Tribune she and children from within the Kingston Group were assigned to forge documents to help further the fraud.
Jacob and Isaiah Kingston are also defendants in a civil lawsuit accusing them of failing to live up to contracts and then hiding assets after they were ordered to compensate the other party.