Washakie Renewable Energy CEO Jacob Kingston and his brother ordered to stay in jail

Posted at 12:21 PM, Aug 29, 2018
and last updated 2018-08-29 19:26:31-04

SALT LAKE CITY -- A federal magistrate judge has ordered Washakie Renewable Energy CEO Jacob Kingston and his brother, Isaiah Kingston, to remain in jail.

At least until she can hear more information about why they should be detained.

The two men appeared before U.S. Magistrate Judge Brooke Wells on Wednesday morning, who indicated she was willing to let the men stay behind bars pending trial. Isaiah Kingston's attorney, Scott Williams, argued there was no reason for his client to be detained.

"Go ahead and argue, but I think that's a losing one," Judge Wells told him.

Williams argued that Isaiah Kingston has a cancer diagnosis, suffers from other health problems and his wife is pregnant and due in the next few weeks.

But government prosecutors argued for his detention, saying he was a 50-percent owner of Washakie Renewable Energy and was entitled to half of $134 million wired to a bank in Turkey, where there is presently no extradition with the United States.

U.S. Dept. of Justice lawyer Leslie Goemaat argued Kingston was a flight risk. She said Jacob Kingston attempted to bribe people connected with the case, using Isaiah to carry money to an intermediary (the intermediary kept the money, she said). Goemaat also claimed a confidential informant in the case got a death threat and was put into a safe house.

"There are very real safety concerns for witnesses in this case," she told Judge Wells.

The judge scheduled a further detention hearing for Isaiah Kingston on Friday and a hearing for Jacob Kingston next week.

The Kingston brothers were indicted by a federal grand jury last week, accused of fraud. The U.S. Attorney's Office for Utah alleges they illegally obtained $511 million dollars in renewable fuel tax credits from the Internal Revenue Service. Lev Aslan Dermen, the owner of California-based fuel company NOIL Energy Group, was also charged in connection with the case. Prosecutors contend the whole scheme attempted to bilk the government out of $1.1 billion.

The indictment stems from a 2016 raid by the IRS on businesses affiliated with the Kingston polygamous family. Outside court, Williams objected to government references to polygamy and the Kingston's church, known as "The Order."

"It’s completely irrelevant, these inflammatory references to The Order is shameful," he told reporters. "There’s no specificity as to how that could apply."

Goemaat refused to comment as she left the courthouse. Jacob Kingston's attorney, Tara Isaacson, also declined to comment. Members of their families accompanied attorneys out of court, but said nothing.

FOX 13 was there earlier this month when Jacob Kingston was facing a lawsuit by a supplier accusing him of pocketing $10 million in a judgment against Washakie Renewable Energy. The supplier accused Washakie of not producing any biofuel. Kingston’s attorney denied any wrongdoing to FOX 13 at the time.

Washakie Renewable Energy was a big spender on Utah's Capitol Hill. In 2016, FOX 13 profiled their donations to state lawmakers, the Utah Republican Party, Governor Gary Herbert and Utah Attorney General Sean Reyes. The $40,000 contribution to Reyes ended up being put in escrow and WRE ceased its political activities shortly after the IRS raid.