How a Polygamist Used Biofuel to Steal $500 Million

TL;DR

A polygamist clan scammed $500M using biofuel fraud.

Transcript

A Utah polygamist family the focus of a federal raid today. This is the work of the Lord. Utah's Kingston clan or The Order, it's also called that, a breakaway Mormon group. The Order isn't really well-known if you're not a part of it or if you're not in law enforcement or if you're not involved in some type of a I guess you could call it the polyg... Read More

Key Insights

• The Kingston clan, a breakaway Mormon group, operated numerous businesses in suburban Utah, avoiding attention while engaging in illegal activities.
• Jacob Kingston, a member of the Kingston clan, led a $500 million biofuel fraud, exploiting government tax credits for renewable energy.
• The clan practiced 'bleeding the beast,' a belief in defrauding the government as a form of resistance against federal laws against polygamy.
• Jacob Kingston was drawn to a lavish lifestyle, influenced by Lev Dermen, a flashy businessman with a questionable reputation.
• The fraudulent operation involved producing biodiesel and claiming tax credits with falsified documentation and lax government oversight.
• The scam involved elaborate schemes, including shipping biodiesel to Panama and back to create fake paperwork for tax credits.
• The Kingston clan's businesses spanned various sectors, including biodiesel, casinos, and rifle manufacturing, often under investigation for fraud.
• Both Jacob Kingston and Lev Dermen face long prison sentences, with the fraud being the largest biodiesel scam in U.S. history.

Questions & Answers

Q: What is the Kingston clan and how are they connected to the biodiesel fraud?

The Kingston clan, also known as 'The Order,' is a breakaway Mormon group based in Utah. They are known for their polygamist practices and involvement in various businesses. Jacob Kingston, a member of the clan, orchestrated a massive biodiesel fraud, exploiting government tax credits for renewable energy, leading to the largest biodiesel scam in U.S. history.

Q: How did Jacob Kingston's lifestyle change during the operation?

Jacob Kingston's lifestyle significantly changed after partnering with Lev Dermen, a flashy businessman. He was seduced by Dermen's luxurious lifestyle, involving private jets, expensive cars, and lavish trips. Kingston began dressing flashily and living extravagantly, which was a departure from the clan's usual low-profile approach, ultimately drawing attention to their illegal activities.

Q: What role did Lev Dermen play in the biodiesel fraud?

Lev Dermen, a businessman with a questionable reputation, played a pivotal role in the biodiesel fraud. He partnered with Jacob Kingston, providing the means and connections to carry out the scam. Dermen's influence led Kingston into a lavish lifestyle, and together they executed elaborate schemes to claim fraudulent tax credits, amassing millions before their eventual arrest.

Q: What is 'bleeding the beast' and how does it relate to the Kingston clan?

'Bleeding the beast' is a principle taught within some Mormon fundamentalist groups, including the Kingston clan. It involves defrauding the government as a form of resistance against federal laws, particularly those against polygamy. The Kingston clan applied this principle by engaging in various fraudulent activities, including the biodiesel scam, to exploit government resources.

Q: What were the government's shortcomings in handling the biodiesel fraud?

The government's shortcomings in handling the biodiesel fraud included lax oversight and inadequate enforcement of standards for biodiesel production. Fraudsters, like the Kingston clan, exploited these weaknesses by producing fake documentation to claim tax credits. The government eventually improved its detection methods, but not before the Kingston clan had already amassed millions through their fraudulent activities.

Q: How did the Kingston clan's business operations contribute to their illegal activities?

The Kingston clan operated numerous businesses, including biodiesel production, casinos, and rifle manufacturing, often using them as fronts for illegal activities. Their diverse business operations allowed them to engage in various forms of fraud, including tax fraud and money laundering, while maintaining a facade of legitimacy. This business network facilitated their elaborate biodiesel scam.

Q: What were the consequences for Jacob Kingston and Lev Dermen?

Jacob Kingston and Lev Dermen faced severe legal consequences for their involvement in the biodiesel fraud. Both were arrested and charged with conspiracy, money laundering, and fraud. They face long prison sentences, with Dermen potentially facing life imprisonment. Kingston's cooperation with authorities may result in a reduced sentence, but both men remain incarcerated as their legal proceedings continue.

Q: What impact did the biodiesel fraud have on the Kingston clan and their businesses?

The biodiesel fraud had a significant impact on the Kingston clan and their businesses. The exposure of their fraudulent activities led to increased scrutiny from law enforcement and jeopardized their entire business network. The clan's reputation was severely damaged, and their illegal operations were brought to a halt. The case highlighted the intersection of crime, religion, and government oversight, drawing national attention to their activities.

Summary & Key Takeaways

• The Kingston clan, a Mormon fundamentalist group, orchestrated a massive biodiesel fraud, exploiting government tax credits and engaging in illegal activities. Jacob Kingston, influenced by a flashy businessman, led the operation, which involved producing biodiesel, creating fake documentation, and claiming millions in tax credits.

• The clan practiced 'bleeding the beast,' defrauding the government as a form of resistance. Jacob Kingston's partnership with Lev Dermen, a businessman with a questionable reputation, led to a lavish lifestyle and ultimately their downfall. The operation involved elaborate schemes and lax government oversight.

• The Kingston clan's businesses spanned various sectors, often under investigation for fraud. Both Jacob Kingston and Lev Dermen face long prison sentences, with the fraud being the largest biodiesel scam in U.S. history. The case highlights the intersection of crime, religion, and government oversight.