It was an unlikely crime partnership: a Bel Air billionaire and gas station titan, who investigators call the boss of the Armenian Mafia. A family of Mormon polygamists known as the Kingston Clan who are members of a brutal Utah blood cult known as “the Order.” Together, they pulled off what the government said is “one of the most audacious tax frauds in history involving the filing of more than $1 billion in false claims”—targeting green energy tax credits intended to subsidize biofuel production but instead, the scheme lined the pockets of criminals.
Spanning nearly a decade, the fraud utilized a cabal of corrupt law enforcement officers and raised serious questions about a former CIA director while it led to money laundering allegations against high-ranking government officials in Belize and Turkey. It also forced a Beverly Hills “lawyer”—who was running a Rodeo Drive firm as he hobnobbed with Gov. Gavin Newsom, Presidents Barack Obama and Donald Trump, as well as other influential L.A. politicos—to admit he paid a ringer to take the California Bar Exam in his place.
This week, the reckonings in the case have arrived. The fraud’s main players are set to face a federal judge in Salt Lake City, five years after a series of dramatic, gunpoint arrests on August 28, 2018.
The sprawling, complex scam began on a cattle ranch in northern Utah where Jacob Kingston— who, according to “the Order,” came from a Mormon bloodline connected directly to Jesus Christ–finished his Ph.D. in engineering and opened a biofuel company called Washakie Renewable Energy. He’d hired his brother. Isaiah, their mother, Rachel, and his first wife, Sally, and went to work “bleeding the beast,” which was the cult’s catchphrase for ripping off the government as reparations for what they believe is the mistreatment of polygamy-practicing Mormons.
Jacob, Isaiah and Rachel are set to be sentenced on Thursday. Sally was previously hammered with a six-year sentence for her role in the scam on Wednesday.
“The Washakie-related crime spree started in 2010,” Assistant United States Attorney Richard Rowling wrote in a sentencing brief. “Before they ever met or knew of Levon Termendzhyan, the four Kingston defendants and their many co-conspirators fraudulently obtained over $40 million in refunds from the IRS.”
Levon Termendzhyan, better known in L.A. by his underworld moniker, “the Lion,” had built a fuel empire in the years after he arrived in California at 14 from Armenia. Known as a garrulous philanthropist in the local Armenian community, he was equally known to be a shrewd, sometimes sinister businessman. In 2012 – two years into the scam – Termendzhyan received a call from Jacob asking for a meeting.
The two met at Termendzhyan’s office in Commerce, a double-wide trailer decorated with Lamborghini furniture. There, a deal was quickly born and soon, Jacob would recall, he was funneling a large portion of his ill-gotten gains to his new partner, primarily to come under an umbrella of protection provided by bought-and-paid-for badges of dirty law enforcement on the Armenian underworld’s payroll. They were known as “the Boys,” and among them were two corrupt federal agents and a crooked Glendale detective; all of these men were convicted of moonlighting for gangsters. Also in on the fraud was a former L.A. Secret Service official, the disgraced one-time L.A. County sheriff, Lee Baca, and a man known as “grandpa,” who court records identify as former CIA director and Trump administration national security advisor James Woolsey, who were never charged with a crime [Baca served time in an unrelated crime].
There were connections, Jacob would frequently brag, “that went all the way to the top.”
The government maintains that with Termendzhyan’s gas-industry know-how and his army of mobsters and dirty cops, he exploded Kingston’s scam. Within a few years, Jacob and the Lion were raking in so much money from fraudulent subsidies—hundreds of millions of dollars, according to prosecutors—they literally didn’t know what to do with it all. At one point, they started stashing cash in Istanbul, where they had plans to flee if things ever went south.
“I have met the president of Turkey,” Jacob recounted in court, describing a trip to Turkey with the Lion during which he’d been introduced to Recep Tayyip Erdogan, and Baran Korkmaz, a Turkish billionaire who has been described in court testimony as a CIA asset. Korkmaz has also been charged in the massive scheme and is being held in a Utah lockup awaiting his October trial.
By the time the fraud went international, Jacob was acting more like a gangster than a man of God barking orders and bragging that he had connections in the CIA who could “walk right up to somebody and prick them with a poison ring and it would kill them,” Isaiah would later testify.
“It could be said that Termendzhyan led the Kingstons like sheep to the slaughter,” argued Rowling in his sentencing filing. “He saw Jacob Kingston and his family as perfect marks: A group already committing crime, led by Jacob, who idolized Termendzhyan’s lifestyle, and who was willing to commit more crimes.”
This is why Rowling is seeking life in prison for the man whose name doesn’t appear on a single document connected to the fraud but instead, was convicted in 2020 of “intimidating” the Kingstons into paying him for protection and money laundering.
“Termendzhyan’s use and intimidation of others to fill his pockets with millions of dollars of taxpayer funds wrecked lives,” Rowling wrote. “Only the real fear of a substantial prison sentence will deter similar fraudsters.”
Termendzhyan’s lawyer, Setera Qassim, has long argued that the real power behind the fraud was Jacob Kingston, whose father and uncle are leaders of the Order, an organization that has built its own empire of businesses in Utah, including a tactical firearms company once visited by Donald Trump Jr. The Order’s standing in Utah is seemingly secured by its own cadre of corrupted officials, including someone in state government who, in 2016, tipped the Kingstons off to Rowling’s investigation and a pending raid on the clan’s compound.
Termendzhyan “allegedly being a ‘leader’ of the conspiracy was a narrative pushed by the government,” Qassim argues in her sentencing brief, even as the evidence in the case repeatedly pointed to the Order, which has a long history of welfare scams, criminal mistreatment of women, and child labor law violations. Jacob’s father, Daniel served time for beating one of his 127 siblings, a half-sister, nearly to death on the ranch where Washakie, the family’s company, stands today. The woman is now featured on the television series Escaping Polygamy.
“He is not part of the family-based, patriarchal Order, which was at the center of this case,” Qassim argues, adding that the government’s push for a life sentence in a white-collar case where no violence has been charged is “disturbing and dangerous.” [Qassim is an attorney with Geragos & Geragos. Mark Geragos is also an attorney for Termendzhyan, and is a co-owner of Engine Vision Media, which owns LA Mag.]
Qassim also points out in her filing that Isaiah’s testimony about the CIA and poison rings may not have been all that far-fetched. When Jacob began cooperating with the government against her client, he told investigators that he believed that some of the stolen taxpayer money he was laundering through Turkey was being funneled to U.S. allies in Syria—with the help of the CIA—for the fight against ISIS.
Since his arrest, Termendzhyan has been held with limited visitation in the Salt Lake City County jail; he’s been teaching himself to read English and living on “a diet of canned tuna wrapped in tortilla bread”—an abrupt departure from his life in Bel Air. His daughter, Anne, has given birth to two grandchildren and implored a judge to show her father leniency.
“I know without a doubt that my dad would have been the most doting and loving grandfather had he been around,” she wrote in a letter to the judge. Speaking for herself and her younger brother, George, she continued, “There are no words to adequately express how much we have missed our father.”
It is unclear if Jacob Kingston’s third wife, Hannah Tucker, will be in court for his sentencing Thursday afternoon. In an unlikely love story element to the sprawling fraud, Tucker was visiting Termendzhyan in jail and the two were plotting to run away together.
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