BEL AIR—A Bel Air billionaire, gas station tycoon and an alleged former leader of the Armenian mafia – Lev Aslan Dermen, 56, also known as Levon “The Lion” Termendzhyan – has been sentenced to 40 years in prison for conspiring with members of a Utah-based polygamist sect known as the Kingston Group, in a $1 billion renewable fuel tax credit fraud scheme, the U.S. Department of Justice released in a statement. After a seven-week trial, Dermen, Jacob Kingston, 46, Isaiah Kingston, 42, Rachel Kingston, 67, and Sally Kingston, 45, were sentenced by a federal jury in Salt Lake City, Utah on Friday, April 7.
The Internal Revenue Service administers refundable tax credits in an attempt to promote and increase the amount of renewable fuel produced and used in the United States.
From 2010-2018, Dermen – the owner and operator of Noil Energy Group, a California-based fuel company; SBK Holdings USA, a Beverly Hills real estate investment company; and Viscon International, a Nevada fuel additive corporation – co-conspired with Jacob and Isaiah Kingston – owners and operators of Washakie Renewable Energy – to ship millions of gallons of biodiesel fuel within the U.S. and from the U.S. to foreign countries and back to make it appear that qualifying renewable fuel was being produced and sold. Dermen and the Kingston’s created fraudulent production and transportation records and cycled over $3 billion through multiple bank accounts in order to legitimize their fraudulent tax claims.
Rachel (Isaiah’s mother) and Sally Kingson took part in the scheme by backdating documents and creating fake invoices. As a result, the IRS ultimately paid out over $511 million in renewable tax credits to Washakie, which the Kingston’s distributed amongst their family, and to Dermen and foreign associates in Turkey. Dermen and the Kingston’s used the fraudulent proceeds to buy mansions in Huntington Beach, California and Utah, a yacht in Turkey, land for a planned casino in Belize, a 2010 Bugatti Veyron, a chrome Lamborghini and a gold Ferrari.
Throughout the scheme, Dermen assured the Kingstons that they were protected by his “umbrella” of corrupt law enforcement and were immune from criminal prosecution. In exchange, the Kingstons transferred over $134 million to laundering companies in Turkey and Luxembourg.
Dermen was found guilty of conspiracy to commit mail fraud, conspiracy to commit money laundering and money laundering. In addition to his prison sentence, Dermen is ordered to pay $442,615,520 in restitution to the IRS, and a money judgment of more than $181 million.
Jacob Kingston, the CEO of Washakie, pled guilty to conspiracy to commit mail fraud, filing false claims with the IRS, money laundering and conspiracy to commit the same, obstruction by concealing and destroying records and conspiracy to commit the same and witness tampering, and was sentenced to 18 years in prison and ordered to pay $511 million in restitution to the IRS.
Isaiah Kingston, the CFO of Washakie, pled guilty to conspiracy to commit mail fraud, aiding and assisting in the filing of false partnership tax returns, money laundering and conspiracy to commit the same and obstruction by concealing and destroying records and conspiracy to commit the same, and was sentenced to 12 years in prison and also ordered to pay $511 million in restitution.
Rachel Kingston pled guilty to conspiracy to commit mail fraud, money laundering and conspiracy to commit the same and obstruction by concealing and destroying records, and was sentenced to seven years in prison. Sally Kingston pled guilty to conspiracy to commit mail fraud and conspiracy to commit money laundering and was sentenced to six years.
The U.S Attorney’s Office and the Justice Department’s Tax Division will seize all assets acquired in what is described as “one of the most egregious examples of tax fraud in U.S. history.”
This is not the first time the Kingston Group, also referred to as “The Order,” have found themselves in legal peril. Last year, there was a lawsuit against the Group alleging unpaid labor, sexual violence and human trafficking.
