Speaker 1: This is Bloomberg Law with June Grasso from Bloomberg Radio.
Speaker 1: Did fearful jurors issue a sham verdict because they were
Speaker 1: panicked about deliberating too long during the coronavirus pandemic. A
Speaker 1: defendant is blaming the coronavirus for his guilty verdict. After
Speaker 1: eight hours of deliberations and a seven week trial, a
Speaker 1: Salt Lake City jury found businessman Left German guilty of
Speaker 1: leading a conspiracy to cheat US tax authorities of five
Speaker 1: million dollars through a program designed to promote clean fuels.
Speaker 1: Joining me is David voriekis Bloomberg Projects reporter David. This
Speaker 1: was a conviction of a Los Angeles businessman for leading
Speaker 1: a biofuel conspiracy with a Utah polygamous group that's a
Speaker 1: shadowy Mormon offshoot known as the Order. Sounds interesting to
Speaker 1: say The least tell us about the case involved Left Derman,
Speaker 1: who three year old man from Los Angeles who had
Speaker 1: a small oil and death empire in southern California, and
Speaker 1: the prosecutors said that he teamed up with a pair
Speaker 1: of brothers and other relatives there from Utah, the Kingston
Speaker 1: brothers Jacob and Isaiah, and what they did was produced
Speaker 1: bio diesel fuel, which made them eligible for credits that
Speaker 1: were administered by the Internal Revenue Service of up to
Speaker 1: two dollars of barrel. And essentially, what the prosecutors said
Speaker 1: is that over several years the kingston submitted Tony tax
Speaker 1: credit applications and defrauded acts there eventually hundreds of millions
Speaker 1: of dollars. What the trial was about was how German
Speaker 1: teamed up with the Kingston's and really accelerated this fraud
Speaker 1: through a variety of teams. And it was a fascinating
Speaker 1: trial about this businessman left German who initilated the Kingston's
Speaker 1: and placed a lot of assets and money in the
Speaker 1: names of others, but profited off those actions. So the
Speaker 1: jury did deliberate eight hours. I've seen juryors go back
Speaker 1: to a jury room for long enough to vote and
Speaker 1: come back out. So why does the defense claim that
Speaker 1: they were afraid to deliberate. Well, what happened in the
Speaker 1: deliberations is they started last Thursday afternoon and then they
Speaker 1: returned Monday and had a verdict by about one thirty
Speaker 1: Monday afternoon. The defense attorney Mark Garrigoas from Los Angeles,
Speaker 1: who has represented a lot of celebrities in his career.
Speaker 1: Michael Jackson said that the jury had no questions at all,
Speaker 1: which sounded suspicious to him. And one of the jurors
Speaker 1: was excused because he had pneumonia after he had been
Speaker 1: wearing a mask, and another juror was excused, and they
Speaker 1: believed that the jury was acting out of panic because
Speaker 1: when the judge asked the panel who was the fourth person,
Speaker 1: they pointed to the empty chair. Now, prosecutors said that
Speaker 1: there was no basis at all for saying that this
Speaker 1: denied Derman affair and impartial jury, and they pointed out
Speaker 1: that the jury during its deliberations did not send any
Speaker 1: notes about the COVID nineteen epidemic, and so that there's
Speaker 1: no basis to conclude that it played any role in
Speaker 1: their deliberations. The four members of the Mormon group pleaded
Speaker 1: guilty before trial, So did they testify against Derman? Was
Speaker 1: the evidence at trial solid Two of the brothers, Jacob
Speaker 1: and Isaiah Kingston testify and they were amongst five sellons
Speaker 1: who were prosecution witnesses who testified against Love Derman. And
Speaker 1: there was a great deal of documentary evidence about how
Speaker 1: money moved and there are also people like Germans employees
Speaker 1: who testified his business partners, his private jet pilot, and
Speaker 1: the government believed that they built a very strong and
Speaker 1: elaborate case that you know, not only rested on the
Speaker 1: testimony of convicted sellons, but hellout documentary corroborations. So the prosecutor,
Speaker 1: who is the u S Attorney for the area, explained
Speaker 1: why this case was important to the state of Utah.
Speaker 1: What did he say? The U S Attorney in Utah,
Speaker 1: John Huber, said that basically, the Kingston's were a close
Speaker 1: knit insular community who practiced polygamy and that they had
Speaker 1: been suspected in breaking the law for decades, but that
Speaker 1: authorities could never build a case against them. And they
Speaker 1: said that, you know, the Kingston's, Jacob and Isaiah Kingston,
Speaker 1: began this biodegal fuel frauds and cheated the government out
Speaker 1: of tens of millions of dollars. But once left Derman
Speaker 1: joined the group. He was not actually part of the order,
Speaker 1: but once he joined the fraud it really took off,
Speaker 1: and then it became a fraud in the hundreds of
Speaker 1: millions of dollars, and they submitted a total of more
Speaker 1: than a billion dollars in tradgulent claims, about half of
Speaker 1: which were honored. So essentially, the U. S Attorney in
Speaker 1: Utah felt this was a big victory against a group
Speaker 1: that operates like an organized crime group and had for
Speaker 1: many years in Utah without prosecution. And Derman himself, prosecutors
Speaker 1: wanted him locked up before trial because he projected a
Speaker 1: menacing air and other reasons. Yeah, he had been in
Speaker 1: custody since August of eighteen, and there was a lot
Speaker 1: of testimony pre trial from agents who said the witnesses
Speaker 1: were very concerned for their physical safety, that German surrounded
Speaker 1: himself with large, menacing people, and there was quite a
Speaker 1: bit of testimony about how German was protected by corrupt
Speaker 1: law enforcement officials both on the state and federal level.
Speaker 1: He called it his umbrella of protection and that was
Speaker 1: part of the trial. Jacob Kingston testifying about that umbrella
Speaker 1: of protection which allowed German to carry out his scheme.
Speaker 1: So who will decide whether or not the jurors were
Speaker 1: afraid to deliberate? Will it be the trial judge? It'll
Speaker 1: be the trial judge in Salt Lake City, Jill Parish,
Speaker 1: She's a federal district judge, but it's really not clear
Speaker 1: when this will happen because immediately after this verdict, the
Speaker 1: appeals court covering Utah closed down the courthouse to the
Speaker 1: public and they'll run on sort of a skeletal staff.
Speaker 1: So that's clearly going to push back the appeal proceedings
Speaker 1: as it's done in courthouses around the country. Thanks for
Speaker 1: being on the Bloomberg Law Show, David. That's David voiags
Speaker 1: Bloomberg Projects Reporter. Thanks for listening to the Bloomberg Law Podcast.
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Speaker 1: and on Bloomberg dot com slash podcast. I'm June Brosso.
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