Polygamous “organised crime family” associates of Erdoğan face federal fraud charges
Jacob and Isaiah Kingston, the two brothers alleged to have run a billion-dollar fraud scheme from the Washakie Renewable Energy company in U.S. state of Utah, are facing federal charges of fraud and money laundering, the Herald Journal reported on Friday.
The remarkable details of the convoluted scheme allegedly run by the brothers includes testimony linking them to Turkish President Recep Tayyip Erdoğan, who a U.S. Inland Revenue Service agent said they had turned to for protection from extradition to the United States.
The Kingston brothers and their associate Lev Aslan Dermen, (also known as Levon Termendzhyan) have been accused of filing false tax credit applications for producing renewable biofuels. The fraudulent claims are said to have been worth as much as $1.1 billion, $511 million of which they received.
The brothers – members of a fundamentalist Mormon clan described by one former Utah attorney general as an “organised crime family” – falsified company records and inflated the amount of fuel the company was producing to gain tax credits.
“Documents also stated that the Kingstons spent millions of dollars on a home in Sandy, Utah, and a Bugatti Veyron sports car worth over $1 million,” the Herald Journal of Utah reported.
A connection linking the brothers with Erdoğan came to the agenda shortly after they were arrested on their way to Turkey, when the Salt Lake Tribune published a photograph of Jacob Kingston meeting the Turkish president and a Turkish businessman, Sezgin Baran Korkmaz.
The meeting reportedly took place in September 2017. Federal lawyers involved in the case reported Kingston had received preferential treatment during the visit, having been allowed to enter Turkey without a passport and granted a police escort.
Korkmaz owns the Turkish firm SBK Holding, which the court discovered had been wired between $130 and $134 million by the Kingston brothers between September 2013 and the end of 2015, in part through direct transfers and in part through a U.S.-based sister company of SBK. Prosecutors also stated in the court that they have "evidence of in excess of $500 million reportedly being invested by Mr. Termendzhyan and his codefendant Jacob Kingston in this Turkish entity and its investments called SBK Holding AS."
Part of that was reportedly spent on a waterfront mansion in Turkey, for which Isaiah Kingston authorised a payment of $483,000 for the value added tax alone.
Prosecutors had already argued that the brothers were a flight risk due to the large sums they held in Turkey, their ownership of a private jet, and an apparent contact in law enforcement who is said to have tipped them off about a raid.
When he gave his testimony in August, IRS agent Tyler Hatcher was the first U.S. official to suggest that the brothers also enjoyed close links to the Turkish president and that they would be protected from extradition in the event they make it to Turkey.
“Witnesses have told us Mr. Baran and Mr. Termendzhyan have used their wealth to ensure that their money would be a safe haven in Turkey as well as protect them against extradition,” Hatcher told Richard Rolwing, the U.S. prosecutor handling the case, according to a transcript obtained by the Salt Lake Tribune.
Erdoğan has already been involved in one long-running extradition dispute with the United States, having demanded the return of Fethullah Gülen, a Turkish Islamist preacher and leader of the Gülen religious movement that the Turkish government blames for carrying out a coup attempt in July 2016. Gülen has lived in self-imposed exile in the state of Pennsylvania since the late 1990s.
The Turkish government has reportedly filed for extradition numerous times, and Erdoğan has said he will not respond to extradition requests from the United States until Gülen is returned to Turkey.
No court date has been set for either Kingston brother or Dermen.