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
uh i guess you could call it the
polygamist underworld
one of the unique things about the
kingston clan compared to other
polygamous groups
is that they do live right in the middle
of
suburban utah and the way
they do this is by not attracting any
attention
they had something like 100 businesses
including a casino
a rifle manufacturer and the
biodiesel fuel plant that jacob kingston
set up jacob kingston has
three wives and 20 children he grew up
poor in utah had sort of a hardscrabble
life
and was drawn to a very flashy
businessman from los angeles who drove
fast cars
flew around in private jets and took
vacations on
yachts jacob kingston was seduced by
that lifestyle
and that ultimately led to him leading
a much fuller life of crime
[Music]
my name is jesse hyde a magazine writer
based in utah
my name is david voriakis i'm a legal
reporter at bloomberg
news and we wrote the polygamists
accused of scamming the u.s
out of 500 million
jacob kingston is part of the davis
county cooperative
society also known as the order and
in the order the men are given numbers
there's a hierarchy
and they are expected to tithe their
earnings
into the church and the leaders of the
church have a
very strong hand in how they lead their
lives the choices they make
the wives they choose the jobs they hold
one of their early leaders taught a
principle that's very common
in mormon fundamentalism called bleeding
the beast
because polygamy is illegal
in the u.s there's a belief that
the federal government really is the
enemy
and so with many of these groups
there's nothing wrong with figuring out
ways to
quote unquote bleed the beast or fleece
the government the kingston's over the
years have been investigated
for tax fraud
child welfare fraud one of the more
common things that former members told
me
they would do and they were encouraged
to do by their leaders
is a mother would go in and claim that
she was a single mom
with seven kids to qualify
for different benefits when in fact she
could have been the third or fourth wife
of a husband
over the past few years members of the
kingston family
who ran a different company called
waushaki renewable energy
have pleaded guilty to dozens of charges
including fraud
money laundering and obstruction jacob
kingston from what i understand
actually had the idea to build
this biodiesel production
plant he recognized that there was a
huge opportunity
the federal government was really
pushing
renewable energy alternative fuels
and there were big tax credits you could
get
prior to jacob they had
sort of focused on businesses like pawn
shops
um or you know commercial property
that's kind of
shabbier jacob was taking them into the
big leagues where
you know he's standing courtside at
halftime at a
utah jazz game presenting a big check to
a charity
so this really was a matter of
moving from the shadows into
the public arena you could almost think
of like
the godfather or any sort of mafia movie
where
over time you know you want to go into
legitimate business you don't want to
live in the shadows anymore
after jacob kingston got his phd
in engineering he then set up
a plant in northern utah on his father's
ranch
what they did was produce biodiesel fuel
which
takes animal fat or used cooking oil
and through a chemical process converts
it into a type of fuel
that works in trucks and in
manufacturing facilities the pure
version of that fuel
is known as b100 and what
they then did was apply for
tax credits that are administered by
both the environmental protection agency
and the internal revenue service those
tax credits
were a dollar a gallon for the fuel that
they produced
that was b100 or what's called b99 a
slightly diluted version
and they also got credit for a renewable
identification number or a win rin
and that was a dollar a gallon as well
and those are sort of a unique
number that can be traded between
companies
washiki renewable energy a proud partner
of the tour of utah is leading the
intermountain west to a future where our
air is clear
clean and healthy it did start as a
legitimate business
kingston found that he could not compete
because of the limitations on his
location
and the difficulties in producing the
material so he began to cut corners and
cheat
the way other people in the industry did
as well
[Music]
in 2011 washiki had run into some
troubles
the biodiesel they were creating called
b99
was being rejected it wasn't pure enough
and so he was looking for someone
to buy it and so he had sent a salesman
out
to people who were involved in this
business who might buy it and that's how
he came across
lev durman and that was the beginning of
what initially was a really profitable
enterprise for both of them
lev durman who called himself the lion
was a man who you could say a self-made
immigrant who created an oil and gas
empire in southern california and
in his adult life he was constantly
under investigation and we talked
to one of his associates who said that
the first time he met lev
he was struck by a guy who was almost
like wearing a costume of a mobster
he's wearing blue alligator shoes a blue
alligator belt
you know he had an office in rodeo drive
and it was like hey let's
go down here for a meal
you know my chauffeur will take us
and you know it's like a block away but
hey if i can get into my
rolls royce and take you a block and the
restaurant shut down just for me
um that's gonna create this appearance
that
i am um i don't know like an organized
crime boss
and so he sort of carried himself that
way it's a question of how much of that
was just for appearance
and how much of that was real
[Music]
when they first met left durman flew his
private jet to utah to meet
jacob kingston and his wife sally german
then flew them to seattle
to meet a friend of his he wined them
and dined them
the kingstons had never been wined and
dined before
they'd never been on a private jet they
went to a seafood store
and lev derman bought
the entire contents of the seafood store
to bring home for the kingstons
over time jacob kingston
was dazzled by lev fast living lifestyle
they bought very expensive sports cars
like a 1.8 million dollar bugatti
for lev durman they bought waterfront
house in california
for leb german they bought a three
million dollar house
in utah for jacob kingston
they took trips together he started
dressing in a flashier way
started wearing cologne he started
cutting his hair differently
it really started to change him he got a
taste for the high life
and he wanted that and in pursuing that
he was sort of breaking an
unspoken order rule and that rule is to
not draw attention
if you start wearing flashy suits and
driving
fancy cars and having
a luxury suite at utah jazz games
being public with your company
sponsoring different things
you're gonna draw attention and so jacob
had a dilemma do we
keep operating the way my uncles
have run the family by staying in the
shadows
or do we go big do we try to make a lot
of money
and for whatever reason he chose the
latter
the epa did not enforce its standards
stringently
and what fraudsters soon learned
is that if they were able to produce
documentation that showed
that they had produced biodiesel fuel
that the government accepted that
documentation and they got
you know their credits eventually the
government got more sophisticated at
rooting out the fraudsters but there
were several years
particularly in the early years jacob
kingston and left durman
perpetrating their fraud that the
government was not
able to keep up with the fraudsters
so there was one particular fraud where
the kingstons and lev durman
used a supplier in florida
and houston who shipped b99
on a barge and senate to the east coast
of panama
and that generated phony paperwork and
then
they trucked it over to the west coast
of panama
and they put it on a different boat and
shipped it up to los
angeles where lev durman's company said
that he was
shipping it to utah for processing
at kingston biodiesel fuel plant the
washaki plant
i talked to a guy who worked for jacob
and he told me that they filled up an
entire rail car with water
as long as they had the documents to
show that they were moving what looked
like biodiesel
the inspections were so laxed to
basically like non-existent
but that was enough to fool the
government and cash in on these tax
credits
the largest and most dramatic example
were two checks combined totaled more
than 160 million dollars that was
ultimately their biggest payday
there were other claims that they put in
that were
disallowed as the government eventually
caught on
fully to their fraud jacob kingston and
his family were arrested
as they boarded a plane in salt lake
city
headed for turkey anything you'd like to
say
a lot of the initial questions that
prosecutors were starting to ask
kind of tipped their hand that this
wasn't going to just be
a case about washing renewable energy
this was going to be a case about the
order and all of their businesses
and this would put everything they had
built at risk
so in a way you know jacob took this big
gamble for the family you know let's go
big time
let's step out of the shadows let's make
a lot of money
and at the end he paid the ultimate
price
yeah that's right the kingston clan has
their fingers in all kinds of businesses
oil lubes grocery stores hardware stores
private investigator firms biodiesel and
that biodiesel
allegedly helped pay for that four
million dollar mansion in sandy where
one of those warrants was served today
the prosecutors were helped at trial by
the cooperation
of five people who had pleaded guilty
and testified under cooperation
agreements
they included jacob kingston and his
younger brother isaiah
prosecutors showed at trial that they
made
nearly 500 million dollars and that the
claims accelerated
at the end of the fraud he then
sent through a very complex financial
path
tens of millions of dollars to left
german
[Music]
now to an eyewitness news investigation
and the strange alliance between a
suspected mobster here in l.a
and a polygamous clan in utah lev durman
was
convicted in march of 2020
after a six-week trial of conspiracy
money laundering and fraud charges
german's lawyer complained
that the jurors panicked and reached
a quick decision only because they were
scared about covet 19 and they wanted to
get out of there
i've known my client for decades and i'm
i'm confident that when he tells me he
did nothing wrong that he's telling the
truth
the second phase of lev durman's
criminal trial
will be a forfeiture proceeding that
begins later this year
in which the government is trying to
recover assets that they say were the
product of money laundering
both lev durman and jacob kingston are
in jail around salt lake city
neither has been sentenced lev durman
faces life in prison jacob kingston
also faces many years in prison but as a
result of his cooperation
and the successful conviction of leb
durman
it's likely that he would get far less
time than he
ultimately could face for the crimes he
admitted in pleading guilty
the kingston fraud was the largest
biodiesel fuel fraud in u.s history
more than 30 cases no one had been
accused
the level of fraud that they engaged in
that they admitted engaging in
you