3 men charged in $500M tax fraud scheme

Source: Amanda Reilly, E&E News reporter • Posted: Tuesday, August 28, 2018

A federal grand jury has indicted two executives of a Utah-based biodiesel company and a California businessman for their roles in an alleged renewable fuel tax fraud scheme that netted more than $500 million, the Justice Department announced Friday.

Washakie Renewable Energy CEO Jacob Kingston and Chief Financial Officer Isaiah Kingston, as well as Lev Aslan Dermen of California, were charged with laundering the proceeds of a mail fraud scheme.

The jury separately charged the CEO with filing false refund claims with the IRS on behalf of WRE Biofuels, which calls itself the “Intermountain West’s largest producer of environmentally friendly Biodiesel.”

The alleged fraud involved tax credits that the IRS administers for the production of renewable fuel.

According to the indictment, the three men created false records showing WRE had produced qualifying renewable fuel. The defendants allegedly routed products through different places in the United States and a foreign country to make it look as if qualifying transactions had occurred.

The indictment also alleges that the defendants used “burner phones” to hide their activity.

The scheme brought in $511 million in fake tax credits, according to the indictment. The defendants allegedly laundered the money, including through the purchase of a $3 million home for Jacob Kingston and a $1.72 million Bugatti Veyron.

|