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How A Utah Teen Helped Take Down A Powerful Polygamist's $1B Fraud Scam
Mary Jacobs Nelson fled the secretive polygamist sect known asThe Orderjust days before she says she was going to be forced to marry her first cousin and brought with her secrets powerful enough to take down a massive biofuel fraud scheme.
Jacob Kingston—a man with three wives and 20 children—had been one of The Order’s prominent members and served as the chief executive officer for Washakie Renewable Energy, a Utah-based biodiesel company. Kingston had gotten interested in renewable energy in the early 2000s during a doctoral program in mechanical engineering. Initially, he set out to create the biofuel himself by turning French fry grease into diesel fuel as part of a new business effort for The Order. The polygamist sect willingly shares all its money collectively with the group’s estimated 3,500 to 5,000 members living within the Salt Lake area.
“They have many million businesses, they have security companies, they’ve got coin and laundry businesses, ice companies, pawn shops, and the idea is you build up these businesses for the greater good to restore wealth,” Lindsey Hansen Park, the host the Year of Polygamy podcast, told "American Greed." Kingston set up a biodiesel refinery on his father’s Utah ranch and by 2008 the company began importing vegetable oil to create the fuel. But its remote location proved to be a challenge, not only for importing the raw materials but also for selling the resulting fuel to prospective customers. The company couldn’t make a profit until Kingston decided to fraudulently take advantage of federal tax credits – without actually making the product.
“Utah was a terrible place to make biodiesel, but as it turns out it was a fine place to commit fraud,” said Arthur Ewenczyk, a former trial attorney with the Department of Justice. Kingston was able to pull off the ruse by connecting with other corrupt operators, who agreed to let him pretend to sell the biofuel. He enlisted his brother Isaiah Kingston, his mother Rachel Kingston and first wife Sally Kingston to help him falsify the books and paperwork.
Over the next few years, Kingston collected government checks totaling an estimated$10 millionbut it wasn’t until he connected with another man, Lev Dermen—an Armenian immigrant known as“The Lion”—that the fraudulent proceeds really skyrocketed. “Once Lev Derman got involved and the conspiracy continued under his tutelage, the amounts of money are mind-blowing,” John Huber, former U.S. Attorney for the District of Utah, told “American Greed.”
By Jill Sederstrom Sep 27, 2022, 10:00 PM ET
https://www.oxygen.com/crime-news/american-greed-jacob-kingston-pleads-guilty-in-biofuel-fraud