A federal jury in Salt Lake City on Monday convicted a Los Angeles businessman on criminal charges related to a $1 billion renewable fuel tax credit fraud scam, according to the U.S. Justice Department.
Lev Aslan Dermen, also known as Levon Termendzhyan, was found guilty on multiple charges of mail fraud and money laundering. He faces up to 20 years in jail.
According to evidence presented during a seven-week trial, Dermen was identified as the owner and operator of Noil Energy Group, a California-based fuel company; SBK Holdings USA, a Beverly Hills real estate investment company; and Viscon International, a Nevada fuel additive corporation.
Between 2010 and 2016, the Justice Department said Dermen conspired with the owners of Washakie Renewable Energy, a Utah-based biodiesel company, including CEO Jacob Kingston; his brother, Isaiah Kingston, who served as chief financial officer; their mother, Rachel Kingston; and Jacob Kingston's wife, Sally, to fraudulently claim more than $1 billion in renewable fuel tax credits from the IRS.
In 2018, a federal grand jury charged the Kingston brothers with illicitly obtaining more than $511 million in biodiesel renewable tax credits from the IRS.
Both Jacob and Isaiah Kingston testified at Dermen's trial.
"This trial was the culmination of years of investigative effort that traced money through a variety of countries and states through a complicated fraud scheme to eventually put money in the pockets of Mr. Dermen," said Don Fort, IRS Criminal Investigation chief, in a statement. "The complicated nature of the scheme shows the determination with which the defendants had to defraud the American public for the sole purpose of lining their own pockets."
On Dec. 20, 2019, President Donald Trump signed a five-year extension of the $1-per-gallon biodiesel blenders tax credit program. The incentive was established in the 2004 American JOBS Creation Act and renewed in the years since.
However, over the years the program has been subject to abuse and fraud.
On March 2, Colorado businessman Matthew Taylor was sentenced to seven years in jail for his role in another biodiesel tax credit fraud scheme.
Taylor created a fake company, Shintan Inc., and between 2010 and 2013 obtained from the IRS more than $7.2 million in tax credits for renewable fuel production, although the company produced not a drop of biodiesel fuel. In addition to his prison sentence, Taylor must pay $7.2 million in restitution to the U.S. government.
Image by Carrie Z from Pixabay
See more from Benzinga
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.