Turkey-linked Utah company tax credit scheme trial enters fourth week

The Kingston brother’s trial in the U.S. state of Utah’s capital, Salt Lake City, involving Turkish government-linked businessman Sezgin Baran Korkmaz, has entered its fourth week.

The case revolves around accusations of a $470 million tax credit scheme by Utah-based Washakie Renewable Energy (WRE), $140 million of which was reportedly sent to Turkey.

Jacob and Isaiah Kingston, also known as the Mormon crime brothers, and Turkish-speaking Armenian descent Levon [Aslan] Dermen were indicted in 2018, but both brothers and other family members of the Kingston family, flipped and pleaded guilty later on, leaving Dermen as the only standing defendant in the case.

The testimony of Jacob, the founder and CEO of WRE, who is a federal state witness in the case, took over a week. According to court proceedings of last week, Jacob gave a more detailed account of the hundreds of million dollars sent over the years to Turkish businessman Sezgin Baran Korkmaz and his company SBK Holding in Turkey. 

Korkmaz is known to be a pro-Erdoğan businessman who has made a name for himself in business circles over the recent years investing in pharmaceutical and finance sectors. The businessman delivered keynote speeches at the American-Turkish Council (ATC) and Turkish-American Business Council (TAIK) annual meeting at the Trump International Hotel in Washington, DC, in 2017. Korkmaz’s other companies, such as Komak, Blane, Stone, Setap and the Luxembourg-based Isanne SARL, have been involved in receiving fraudulent money, as cited in the case indictment.

Jacob Kingston made the argument in court that it was Dermen’s guidance that allowed them to engage in such a large number of fraudulent attempts, securing half a billion dollars in total. 

Kingston’s WRE was the headquarters of the fraud, producing paperwork to apply for $1 per gallon stimulus from the Internal Revenue Services (IRS) claiming that it was turning sludge and wastes into biofuel. They then sent over $140 million to Turkey, losing traces of money in a safe haven. U.S. law enforcement forces were unable to receive any cooperation from the Turkish side.  

In a testimony on February 10th, Jacob said he was on a trip to Turkey with Levon and Korkmaz in September of 2013, where they decided to buy a warehouse in Istanbul and flip it, local reporter Nate Carlisle, who is following the case at the courtroom from The Salt Lake Tribune, told Ahval.

The investment that was started in 2013 continued until the Kingston brothers were indicted in 2018.

An e-mail from Umut Uygun, who was the translator between Korkmaz and Kingston and later became a partner in some of the investments, said that Korkmaz had invested Kingston and Levon Dermen’s money into a real estate, technology company and an asset management bank in Turkey. Kingston also testified that he never got any of his investments back from Turkey. 

According to prosecutors in the third week of the trial, Kingston said that he was unable to retrieve tens of millions of dollars of investments he had sent to Turkey, despite repeated requested he made to Korkmaz and Dermen.

According to the U.S. tax administration’s (IRS) investigations and evidence they collected, Dermen was able to manage a considerable part of the money flow and was in charge of Turkish investment portfolio along with Korkmaz, even though the headquarters of the fraudulent mechanism was WRE and the owner the company is Jacob.

According to Kingston’s testimony on February 11th, on April 2014, he asked his brother and another defendant turned witness, Isaiah Kingston, to send him a list of all payments they had made to Turkey. Isaiah sent him a list of payments from 2013 and 2014 totalling $43,538,700. Payments went to SBK and Korkmaz’s company Komak, in addition to a $10 million payment to Jacob’s personal bank account in Turkey. 

Kingston’s testimony claims that he was unable to manage the investment he made Turkey despite the fact that he was the owner on paperwork. For example, Kingston said he sent money to a technology company in Turkey on the instruction of Dermen. “I was told I was the owner and face of this company. It was called Service Technology,” Dermen told him. On May 9, 2014, Kingston said he sent $2 million to the same technology company in Turkey. Understood Service Technology, to be a credit card transaction company Levon bought as a distressed company.

Kingston also asked Korkmaz and Uygun to return money but they refused. This went on for about six months according to Kingston. Even for the Turkish assets in Kingston’s name, everyone refused to give him any money for those assets. 

According to another part of the testimony, some of the money Kingston sent Turkey was returned to Dermen without his knowledge and he lost close to $50 million in Turkey. 

There is a photograph of Kingston, Korkmaz and Turkish President Recep Tayyip Erdoğan shot in New York in September of 2017, on the sidelines of United Nations General Assembly meetings. Kingston, for the first time, said Dermen was also in a meeting with Erdoğan and shook hands with the president. This news was not brought to light earlier in the case.

The opinions expressed in this column are those of the author and do not necessarily reflect those of Ahval.