6: Strip Search

Summary

Kingdom of Fraud, Episode 6: Strip Search

Podcast: Kingdom of Fraud
Host: Michele McPhee
Date: June 16, 2026

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Episode Overview

In “Strip Search,” Michele McPhee unravels the pivotal moment when the Kingston-Order/Armenian mafia alliance comes under full federal assault. The episode focuses on the fallout from coordinated raids, the anti-climax of emptied evidence sites, and the tension between conspirators as the investigation zeroes in on the shadowy puppetmaster, Levon Termendzhyan. Via interviews, first-hand accounts, and investigative commentary, listeners follow the IRS “Tax Avengers” as they untangle one of the most complex frauds in American history, tracking the money from Salt Lake to Los Angeles to Turkey and back.

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Key Discussion Points & Insights

1. The Raid: Covering the Telltale Evidence

Timestamps: 02:15–06:54

• As tipped off by “Mr. Green,” Jacob Kingston frantically scrambles to remove incriminating materials from both his home and Washakie Renewable Energy (WRE) headquarters.
  • Jenny Kingston recounts:
    “He told us we had to get all of our pictures down off the wall. Anything that has to do with the order, then we had to hide and take out of our house.” (02:40)
  • Employees physically remove hard drives and documents, while the Order’s leadership is warned.
• Despite an impressively methodical cover-up, the feds serendipitously discover a backup server—holding four terabytes of data—overlooked by the desperate clean-up crew.
  • Federal Agent (Narrator):
    “Turns out there was a backup server nobody knew about, but we did, so we grabbed it.” (06:28)
  • Agent’s take on the data:*
    “Give me ten years to go through all that evidence.” (06:45)

2. Inside the Investigation: The ‘Tax Avengers’ Assemble

Timestamps: 06:54–11:16

• Special Agent Tyler Hatcher (“Captain America”), Special Agent Steven Washburn, and DOJ prosecutor Arthur Avenchik comprise the core investigation team.
  • Arthur Avenchik:
    “It was a big case, and it was a big deal to be assigned to that case.” (09:45)
• The team struggles with a suspected leak but determines that the leak did not originate from their core team; the source remains a mystery.
  • Tyler Hatcher:
    “We are keeping this one close to the vest. Nothing got shared outside of the group.” (10:44)

3. Narrowing Down the Target: Biofuel Fraud

Timestamps: 11:16–13:40

• The complexity of the Order forces agents to focus on the most egregious aspect: biodiesel tax credit fraud at WRE.
  • Tyler Hatcher:
    “This biodiesel fraud is very egregious because that's where most of the money was coming from.” (11:21)
• The turning point: One member of the operation flips—Daryl Leon, the Miami logistics man, becomes an informant.
  • Daryl and Jacob’s conversation is laced with paranoia (“take off your shirt,” “put your cell phone in the microwave”) (14:21).
  • Daryl’s account:
    “Now is the time for the people that we paid to go to work. He said, be strong.” (14:21)

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4. The Informant and Internal Tensions

Timestamps: 13:40–16:58

• Daryl’s cooperation (“Queen for a Day”) provides investigators with an exhaustive map of the fake biofuel transactions, kickbacks, and money laundering—but initially misses Levon’s direct involvement.
  • Arthur Avenchik:
    “Darryl, at that point, has already been in touch with an attorney and has already made contact with the government.” (15:39)
• Agents realize: Levon’s name is almost absent from documentation; his company Noil is just one of many, enabling his invisibility.
  • Tyler Hatcher:
    “His fingerprints were just so far removed, you couldn't quite get a grasp on him.” (17:28)

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5. Following the Money: Turkey, California, and Back

Timestamps: 17:52–31:41

• Tyler Hatcher reconstructs the tangled banking web using “unending Excel spreadsheets.”
  • Tyler Hatcher, on his process:
    “I just worked in my office and just threw headphones on when I'm doing stuff like spreadsheets. … I compiled all these spreadsheets for each bank account I went through and tediously reconciled them to make sure they matched.” (18:14)
• A “red flag” emerges:
  • Tyler:
    “If they were buying fuel, money should be coming from Noil to Washakie to buy the fuel. And it wasn't going that way. It was coming from Washakie to Noil. So that was my first red flag.” (19:23)
• Fieldwork in LA helps establish Levon as a true target:
  • Lavon exudes a wannabe gangster persona (“black silk shirt … jewelry … the whole thing” (27:20)), surrounded by Escalades and lion statues.
  • Tyler Hatcher:
    “It only takes me a few seconds to kind of read into somebody. … After my interaction with him, I remember leaning over to my co-cage and I said, you know you? Yep, that is our target. He's involved way more than just being an offload for fuel.” (28:49)

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6. Breaking the Case: Establishing Levon’s Puppetmaster Role

Timestamps: 29:19–31:54

• Dozens of witnesses recall Levon negotiating fraud deals, often taking the lead in meetings while Jacob plays a passive role:
  • Tyler Hatcher:
    “We talked to all these witnesses getting information … Jacob was there, but Lavon was also there, and Jacob just sort of shut up in the side, and Lavon ran the meeting.” (30:00)
• Agents follow the money trail through international transfers, discovering that over $100 million goes to Turkey, only to come immediately back to a Levon-controlled company (Speedy Lion) in California.
  • Tyler:
    “Money goes to Turkey and then immediately comes back to the US and it goes to Levan's benefit.” (31:00)
• It becomes clear Levon is not just peripherally involved: “the puppet master you can’t see.” (31:41)

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7. The Fraud Escalates—and Unravels

Timestamps: 35:07–43:07

• The Boldest Move: Even under investigation, Jacob and Levon file new, staggering biodiesel tax credit claims totaling $644 million—an audacious attempt to balloon the fraud to over $1 billion.

  • Tyler Hatcher:
    “It was just an insane amount.” (35:20)

• Desperation and Betrayals:

  • Levon begins distancing himself legally by suing Jacob, a move designed to explain the transfers if questioned, while also squeezing Jacob for cash.

    • Arthur Avenchik on Levon’s motivation:
      “He's just doing everything he can to claim that he is in an antagonistic relationship with Jacob. … he's creating distance.” (39:27)
    • Arthur Avenchik on Levon’s threats:
      “He's squeezing Jacob Kingston for every penny that he can get. Their conversations are just about, you owe me money, you need to get me the money. Don't talk to me unless it's to give me money.” (39:54)

  • As the walls close in, Jacob is forced into a “fire sale,” liquidating assets, even a “chrome Lamborghini” gifted by Levon, to pay for alleged protection via a Turkish money-launderer, Baran Korkmatz.

    • Baran dangles elite connections as deliverance, but takes $6 million and leaves Jacob empty-handed.

  • Flight Risk: In August 2018, Jacob and Sally book tickets to Turkey, sparking immediate federal panic; if they escape, the entire investigation is imperiled.

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Memorable Quotes

• On the complexity of crime:
  “I remember looking at [the Order org chart], and just the way it was plotted out on a sheet, I was like, yeah, that's definitely organized crime.”
  – Tyler Hatcher (08:44)

• On banking detective work:
  “When I got done with these spreadsheets, every bank account reconciled to the penny.”
  – Tyler Hatcher (19:03)

• On Levon’s criminal savvy:
  “Lavon, the way he set up his deal was actually very, very, very smart. His name is basically invisible in the documents.”
  – Narrator/Investigator (17:07)

• On the power dynamics:
  “There’s the Utah side, ... And then there's Levon, who's sort of like the puppet master that you can't see.”
  – Tyler Hatcher (31:41)

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Important Timestamps

• Federal Raid & Cleanup: 02:15–06:54
• Assembly of ‘Tax Avengers’: 06:54–11:16
• Daryl Leon Flips (‘Queen for a Day’): 13:40–16:58
• Money Trail Red Flags: 17:52–19:44
• First Confrontation with Levon: 27:00–28:49
• Turkey & International Transfers: 30:33–31:16
• IRS Brazen Tax Claims: 35:07–36:01
• Asset Liquidation & Final Acts: 40:56–43:07

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Tone and Style

Michele McPhee’s reporting is brisk, vivid, and laced with dark humor as she spotlights eccentric personalities (“Captain America,” “the puppet master”), the underlying paranoia, and the shifting alliances between criminals and government agents. The episode is both investigative and cinematic, echoing the tension of a high-stakes crime thriller.

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Summary

“Strip Search” crackles with the tension of criminal empire collapse, as mistrust, betrayals, and fateful mistakes bring the billion-dollar Kingston-Levon conspiracy undone. The episode shows how the smallest slip (a forgotten server, an overlooked bank transfer) can overturn the best-laid criminal plans—while the feds, after years in the shadows, finally close in.

Preview for Next Week:
The episode ends on a cliffhanger, with the feds racing against time as Jacob Kingston, out of money and nearly cornered, prepares to flee to Turkey—a move that could make the entire case evaporate.

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For more from "Kingdom of Fraud," visit Novel Audio.

Transcript

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[Michelle McPhee]

Novel. The Kingston household is thrumming with activity. Days ago, a guy named Mr. Green tipped Jacob off about imminent federal raids. Now Jacob is trying to remove anything that could incriminate him or the order from the house he shares with his froling family.

[Jenny Kingston]

He told us we had to get all of our pictures down off the wall. Anything that has to do with the order, then we had to hide and take out of our house.

[Michelle McPhee]

Jenny Kingston has been married to Jacob's son Jacob Jr. Since 2015. Now, in February 2016, she's among the many family members helping her father in law clear the Salt Lake city mansion.

[Jenny Kingston]

He just told us all that they're gonna raid us and to be prepared.

[Michelle McPhee]

Jenny says she doesn't know anything about Jacob's fraud, but something dramatic is clearly unfolding, so she does what she's told. Meanwhile, Jacob is orchestrating the same frantic cleanup at his company headquarters. And at the remote d. WRE plant. Employees are ripping hard drives out of computers, moving boxes of documents. But Jacob also knows that it's not just him and his company that the feds are targeting. And he's warned the order big shots.

[Jenny Kingston]

He also said that he told Paul and a bunch of the order businesses that the raid was coming and that they should hide all their stuff.

[Michelle McPhee]

A storm is gathering over order members.

[Jenny Kingston]

They're trying to get Paul, is what we were told, trying to get the order. And they're doing it through Jacob's companies

[Michelle McPhee]

after they've done all the covering up they can. Members of the family wait until one cold Wednesday morning in February.

[Jenny Kingston]

I was naked in bed asleep, and I remember banging on the doors really loud, the front door and the garage door at the same time. I remember like waking up and a bunch of police officers around holding shields and then big guns, ton of them, all through the house. They're like, put your hands up. They brought us all into the big main room all together while they searched and raided the houses.

[Michelle McPhee]

That same morning at the wre headquarters in downtown Salt Lake City, armed officers smashed through the front door with a battering ram. They swarmed throughout the building and spread across the open plan office. This raid is meant to be a moment of triumph for the feds. They're finally coming out of the shadows. But they quickly realize something is not right.

[Narrator/Investigator]

They'd go into a desk and there was literally a dust outline of where a computer used to be.

[Michelle McPhee]

Tyler Hatcher is a special agent in charge with the IRS criminal investigations division.

[Narrator/Investigator]

There were files we knew we wanted, transactions with, blah, blah, blah.

[Michelle McPhee]

On these days, his team is scouring filing cabinets and drawers, looking for anything and everything listed on their search warrant.

[Narrator/Investigator]

Completely empty, Gone, just gone.

[Michelle McPhee]

The place has been cleaned out. Has someone on the team been leaking? Confused agents wander around trying to make sense of what they're seeing. All this potential evidence against Jacob. Or the order has evaporated, or so they think. Until the agents make a discovery.

[Narrator/Investigator]

We really lucked out.

[Michelle McPhee]

In all that frenetic activity to clear out evidence, one crucial thing was forgotten.

[Narrator/Investigator]

Turns out there was a backup server nobody knew about, but we did, so we grabbed it.

[Michelle McPhee]

A backup server that contains everything. Every document, every email that has been stored, sent, or received by Washakie Renewable Energy.

[Narrator/Investigator]

There was, like, 4 terabytes of data off that server. Like, give me 10 years to go through all of that evidence.

[Michelle McPhee]

The feds found a treasure trove. What's in there will blow their minds. My name is Michelle McPhee, and from the teams at Novel and iHeart podcasts, this is Kingdom of Fraud. Episode six, Strip Search. Tyler Hatcher's first meeting about the Order will forever be emblazoned in his brain.

[Narrator/Investigator]

I remember it vividly.

[Michelle McPhee]

It's the summer of 2016, a few months after the raids, and one of Tyler's bosses has a question for him.

[Narrator/Investigator]

Can you pop in for this meeting? We've got this really big case. My background is organized crime and drug cartels. And she said, hey, you know, it's not typical of what you're used to, but it has a very organized crime feel to it.

[Michelle McPhee]

Tyler is happy to sit in. He's been hoping to make his way back home to Salt Lake City. Until now, he's been posted in the

[Narrator/Investigator]

Netherlands at my jiu jitsu club. There, I was the only American, so they nicknamed me Captain America. So it's kind of stuck.

[Michelle McPhee]

That's hilarious. Okay, that explains the Captain America sock sticking out of Tyler's pant leg during our interview.

[Narrator/Investigator]

You should see my office.

[Michelle McPhee]

I did. It's like a Captain America museum in there. Anyway, back in 2016, Tyler walks into that big case meeting, and they had

[Narrator/Investigator]

this org chart, if you will, of all the family members of the order. I remember looking at that, and just the way it was plotted out on a sheet, I was like, yeah, that's definitely organized crime.

[Michelle McPhee]

That's Tyler's opinion. After seeing the complicated labyrinth of connections laid out in the chart.

[Narrator/Investigator]

The biofuel side of it was a small part of the overarching case at that point. The original case was looking at the finances of the family and of the organization.

[Michelle McPhee]

The agents need to dig through the mountains of seized data and figure out whether there's enough evidence to actually prosecute anyone. Tyler is more than game to help. Around this time, Special Agent Stephen Washburn also joins the team.

[Tyler Hatcher]

They said, we need you to help out on this case.

[Michelle McPhee]

And sometime later, so does Arthur Avenchik, a federal prosecutor from the Department of Justice.

[Arthur Avenchik]

It was a big case, and it was a big deal to be assigned to that case.

[Michelle McPhee]

Now Captain America is joined by the Tax Avengers. When the team shakes into place, it consists of nearly a dozen agents and prosecutors. From the get go, they're worried about the leak. The mysterious Mr. Green. Was it someone on their own team? Who do you think the leak was?

[Jake Otajevic]

You know what?

[Narrator/Investigator]

To this day, I honestly don't know.

[Michelle McPhee]

It's unequivocal that the phone call.

[Narrator/Investigator]

Absolutely.

[Michelle McPhee]

A phone call was made from an IRS building.

[Narrator/Investigator]

That was the allegations that it came in from an IRS number. We ran that down and that that's not accurate. It did not come from an IRS network phone. But that's not saying it wasn't an IRS employee. That's possible.

[Michelle McPhee]

Apparently, the feds never figure out who the leaker was. But by then, Jacob has so many connections that it really could be anyone. Which is why Tyler says they run an extremely tight ship.

[Narrator/Investigator]

We are keeping this one close to the vest. Nothing got shared outside of the group. And when we did something, we were only letting the people know that needed to know.

[Michelle McPhee]

As the team works through the evidence from the raids, it becomes clear that the money trails are beyond complex. They can't chase down every lead. Any investigation into the group as a whole would be too broad. They have to narrow their focus.

[Tyler Hatcher]

We gotta just pick a horse and race it.

[Michelle McPhee]

Steven Washburn says one part of the sprawling case stands out.

[Tyler Hatcher]

This biodiesel fraud is very egregious because that's where most of the money was coming from. Washakie.

[Michelle McPhee]

The agents see hundreds of millions of what they suspect to be defrauded US Dollars flowing in and out of Wreath.

[Narrator/Investigator]

The prosecutors made the decision that the biofuel was much bigger than anything else we were looking at. And so at that point, we decided to really focus on the biofuel stuff.

[Michelle McPhee]

But there's also another reason. They zero in on wre someone inside the operation has flipped. After those raids, Jacob starts making calls. His first is to Daryl Leon. Remember that logistics guy from Miami? The one Levon suspected of snitching a few years ago? Jacob and Darrell had agreed to a clandestine code that would signal the feds have shown up. In this call, Jacob drops it, saying, we bought soybeans today. He also can't help himself and adds a little chest thumping. I'm on TV. Turn on Fox 13 and you'll see me.

[Jenny Kingston]

Federal agents shut down businesses tied to the Kingston Polygamist group Fox 13 confirmed it's tied to the group's vast business empire.

[Michelle McPhee]

Jacob also called Lavon, but they're not taking any chances. On the phone, Jacob suggests that they meet at their spot, which happens to be in Sin City, at their favorite hotel, the Wynn. A few days later, they meet up in the grandeur of the hotel atrium. Jacob starts to run his mouth, but Lavon shuts him up with a look and leads the way towards the elevators. It's likely Jacob can't help but be nervous following his techy business partner into a luxury suite. And he wasn't wrong. Lavon immediately orders him to strip down to his underwear, straight out of a cheesy cop drama. When Lavon doesn't see a mic taped to Jacob's chest, they get down to business. Here's my producer Jake reading Jacob's testimony about this scene.

[Jake Otajevic]

He said that the raid was not in the system, that he was not aware of it, and that his boys would look into it and try to take care of it.

[Michelle McPhee]

Lavon tells Jacob to stay strong, to keep his mouth shut, and he sends him to talk to Daryl, who he still doesn't trust. So a couple of weeks later, Jacob shows up in Miami, and he texts Daryl to meet him at a restaurant called Organic Bites, just a block away from Miami Beach. I've got Darryl's testimony about his meeting with Jacob. So here is my super talented producer Jake, switching roles and reading Daryl's version of events.

[Jake Otajevic]

I had my wife drop me off nearby. I was concerned for safety. I walked a couple of blocks down to Organic Bites. I don't see him there. I saw him across the street at a motel, waving at me. I crossed the street. We went inside his motel room, and he said, take off your shirt. He wanted to know if I was wired. I had just gotten a tattoo that he didn't know about. He told me once that tattoos were like a. No, no. That the body is a temple. And so I was a little embarrassed. I took off my shirt. He took off his shirt. I turned around, and then he asked me to put my cell phone in the microwave. He asked me if I'd spoken to the government. I told him no. He said, don't worry. There are people on the inside who are going to take care of this. Now is the time for the people that we paid to go to work. He said, be strong.

[Michelle McPhee]

It's clear no one in this conspiracy trusts anyone anymore. But they all reassure one another they're not a rat. Only Lavon was right. Daryl could not be trusted. He's already joined Team America.

[Arthur Avenchik]

Darryl, at that point, has already been in touch with an attorney and has already made contact with the government.

[Michelle McPhee]

Darryl has become queen for a day. Fed speak for the first person in a massive criminal conspiracy to roll.

[Tyler Hatcher]

As soon as the rate hit, he's like, all right, I got to go in first. I got to talk. He was very, like, anxious about it, and he's like, I gotta get in there, and I'm done with this.

[Michelle McPhee]

Daryl's information is a crucial turning point for the entire case.

[Narrator/Investigator]

Absolute gold mine for us.

[Michelle McPhee]

He spills everything he knows about the biofuel fraud, about how he orchestrated the cycles of tankers and trucks through Panama, how he faked endless paperwork at Jacob's behest, how he and Jacob sent tens of millions of dollars back and forth in fake biofuel sal. What he describes is fraud on a gigantic, unimaginable scale. But the scheme Darrell outlines doesn't include Levon. Darryl has worked closely with Jacob and his family, but he's only ever met Lavon four times. As far as the feds are concerned, it's as if Levan doesn't even exist.

[Narrator/Investigator]

Our original case, it was Jacob, Isaiah, Sally, and Rachel.

[Michelle McPhee]

Just the Kingstons.

[Narrator/Investigator]

Lavon, the way he set up his deal was actually very, very, very smart.

[Michelle McPhee]

His name is basically invisible in the documents the agents are going through. Only Noyle, his company, pops up here and there as one of the many clients who have bought fuel from WRE over the years.

[Tyler Hatcher]

His fingerprints were just so far removed, you couldn't quite get a grasp on him.

[Michelle McPhee]

But Tyler and his team continue painstakingly poring over documents, building out a picture of this fraud with unfettering precision.

[Tyler Hatcher]

A big portion of my time was consumed on analyzing these bank records.

[Michelle McPhee]

The agents pull years of data from dozens of bank accounts connected to wre. They trace money flowing between Jacob's company and its customers. They load all of it into gargantuan spreadsheets. God bless these agents. Unending Excel spreadsheets visit me in my nightmares.

[Tyler Hatcher]

I just worked in my office and just threw headphones on when I'm doing stuff like spreadsheets. As dumb as it may sound, I listen to a lot of EDM music. There are no words getting in my head to throw me off that I can just sort of tune out. I'm just looking at numbers. I compiled all these spreadsheets for each bank account I went through and tediously reconciled them to make sure they matched. All right, this account, the balance I have from the spreadsheet is off by like $2500 and I'd have to go through and make sure that I could account for all that $2,500.

[Narrator/Investigator]

My family wasn't with me at the time so I was open to working 10 and 12 and 14 hour days and so I just jumped into all of the bank spread trying to figure out who the players were.

[Tyler Hatcher]

When I got done with these spreadsheets, every bank account reconciled to the penny to what the bank statement said.

[Michelle McPhee]

It's during one of these long ass days of endlessly trudging through spreadsheets when Tyler spots something.

[Narrator/Investigator]

I started noticing this money going to Noil which didn't make sense to me because I knew what Noil was. I knew they were a retail gas station, right? So if they were buying fuel, money should be coming from Noil to Washakie to buy the fuel. And it wasn't going that way. It was coming from Washakie to Noil. So that was my first red flag.

[Michelle McPhee]

Tyler leans back in his chair. Bingo. Jacob's company has been sending Levan's company tens of millions of dollars making it look like there is another player in Jacob's fraud. Someone they totally overlook. Until now. After the break, Tyler tugs at this loose thread.

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[Michelle McPhee]

In the days and weeks after the search warrants, it seems to Jenny Kingston that Jacob's main concern is is protecting the order.

[Jenny Kingston]

He was worried that they were going to get Paul and that it would be his fault that Paul got arrested. That was the biggest thing he was worried about.

[Michelle McPhee]

She also notices a shift in Jacob when talking about work.

[Jenny Kingston]

The way he acted in like family meetings and stuff and you could just tell that something was bothering him.

[Michelle McPhee]

Before, Jacob had all these grandiose visions for the future of his business empire.

[Jenny Kingston]

Now he just was less aggressive about his plans and getting things done and more of like we need to focus on protecting ourselves and protecting our businesses. Like setting up these businesses to where like if this one got sued then it doesn't have any assets tied to

[Michelle McPhee]

Sounds to me like on the surface Jacob wants to seem totally in control, but Jenny can see the stress.

[Jenny Kingston]

He picked at his fingers a lot, the skin around his fingernails and they would bleed.

[Michelle McPhee]

Jacob has plenty of reasons to worry because just a short drive across town at the IRS Salt Lake City field office, federal agents are working to figure out what this NOIL connection really means more and more of the evidence is pointing them towards Levant.

[Tyler Hatcher]

We started noticing there was an orbit and that orbit happened to be in Los Angeles. We're like, all right, there's gotta be more here than just seller of fuel and his customer. It was almost like a black hole out there where you knew stuff was moving around him but you couldn't quite see it.

[Michelle McPhee]

What's really needed to untangle this relationship is boots on the ground, door knocking. In Los Angeles, I was teamed up

[Tyler Hatcher]

with Tyler Hatcher and we were the LA guys.

[Narrator/Investigator]

Lavon's place was in Beverly Hills, so we would stay out there depending on where we could get a hotel.

[Tyler Hatcher]

We pull up in LA and we're just interviewing witnesses.

[Michelle McPhee]

Tyler and Steven spend weeks stuck in traffic on LA's thoroughfares. They badge their way past security guards at gated communities and hang out at upscale hotels, hoping that someone talks, something shakes loose. All to get to the bottom of how Lavon fits into this puzzle and who Noel's mysterious owner really is.

[Narrator/Investigator]

Everybody around him were scared. I mean, there's stories where, you know, one of our witnesses was at dinner in Hollywood somewhere. Lavon shows up and just starts screaming, like in public at this witness. Intimidating and threatening and that kind of stuff.

[Michelle McPhee]

It doesn't take them long to realize lavine has a colorful history with LA law enforcement, but his role in Jacob's fraud is a little less clear. So the agents get a subpoena in hopes of figuring out Noyle's relationship with wra.

[Narrator/Investigator]

I was trying to figure out what did Noyle buy or what did they sell to Washakie.

[Michelle McPhee]

Tyler decides that he and Stephen will deliver this subpoena.

[Narrator/Investigator]

Personally, I wanted to kind of get a read on, like, what was his bravado? What was his. It was his character.

[Michelle McPhee]

They make the same drive Jacob has so many times down an LA highway to Commerce.

[Narrator/Investigator]

I came up and parked right behind the SUVs, and that's where I ran into the bodyguards.

[Michelle McPhee]

As ever, the black Escalades, the bulky bodyguards and Lavon's lion statues stand guard outside the double wide trailer office. The agents flash their badges and ask for the guy in charge, which is when Lavon walks out of the trailer.

[Narrator/Investigator]

He's, you know, got that kind of pompous swagger to him. Greasy kind of wannabe gangster guy, right? Like, I think at the time he had like a black silk shirt on and black pants and just, you know, jewelry and, you know, the. The whole thing, right?

[Michelle McPhee]

This is Lavon's first impression on the agents. The way Tyler tells it, it wasn't a very good one. So Tyler decides to push Lavan's buttons a little.

[Tyler Hatcher]

Tyler says, I'm sorry, who are you? And he's like. He seemed a little offended. He's like, I'm Levan. And we're like, okay, what's your last name? Levan. And he's. He seemed very flustered that we didn't know who he was. I'm tremendous. And we're like, oh, okay, Lavon Tumenzian, okay. And he's like, who are you? I've. I own this. And he looked at us and said, you're feds. How do you not know who I am?

[Michelle McPhee]

Eventually, the agents tell Lavon they're investigating Jacob Kingston and his company. Lavon doesn't even flinch. He insists he's just Jacob's customer. Tyler and Steven hand over the subpoena for records and take off.

[Narrator/Investigator]

Our conversation was literally maybe five minutes.

[Michelle McPhee]

Those records themselves were not very illuminating. For Tyler, though, it's the meeting with Lavon that matters.

[Narrator/Investigator]

It only takes me a few seconds to kind of read into somebody. And, like, after my interaction with him, I remember leaning over to my co cage and I said, know you? Yep, that is our target. He's involved way more than just being an offload for fuel.

[Michelle McPhee]

So they keep scratching at their growing suspicions about this guy.

[Narrator/Investigator]

I did dozens of interviews, and as a team, we did hundreds of interviews, in this case, with anybody and everybody that sold fuel or purchased fuel and were able to kind of build that story.

[Michelle McPhee]

Many of these people turn out to be co conspirators. The fraud who did business with Jacob in a bunch of corrupt and complicated ways.

[Narrator/Investigator]

My job was always to get people

[Michelle McPhee]

basically to cooperate, which isn't all that difficult.

[Narrator/Investigator]

None of these people were willing to do 15 years in federal prison for their small part. So many of them were happy to play ball with us. And many of them were pointing at Lavon, saying that he was involved in some of the negotiations on behalf of. Of wre. And so we weren't quite sure why Lavon would be speaking on behalf of wre.

[Michelle McPhee]

This comes up over and over again.

[Tyler Hatcher]

We talked to all these witnesses getting information about this meeting at a restaurant in LA where they're talking about fraud, and Jacob was there, but Lavon was also there, and Jacob just sort of shut up in the side, and Lavon ran the meeting.

[Michelle McPhee]

They start to think, is Levan actually running the whole show? It's a tantalizing theory, but to prove it, they need to find something concrete against him. These are IRS agents. So there's only one thing to do.

[Tyler Hatcher]

You gotta follow the money, see where it goes. And that really led us to Turkey. Over $100 million was sent to Turkey.

[Michelle McPhee]

They discover the Turkey connection, the investments that Jacob sunk the stolen money into. But as the agents follow the money, they realize that a big chunk of it didn't just stay in Turkey. In many cases, it was just a flyover country for the stolen loot.

[Tyler Hatcher]

That money was almost instantaneously transferred back to California to a company called Speedy lion, which is associated with Levan. Like, the money goes to Turkey and then immediately comes back to the US and it goes to Levan's benefit.

[Michelle McPhee]

All of a sudden, the whispers about Levan from co conspirators and cooperators are taking shape. Now the agents believe they have hard evidence Levan was benefiting from the fraud.

[Narrator/Investigator]

All of that pointed to Levan. Like every time Levon and Jacob went to Turkey, Jacob was clearly there as just like a passenger princess. And it was clearly Levan pulling the strings.

[Tyler Hatcher]

There's the Utah side, the physical operations of what's going on at the plant every day, Isaiah and Jacob and all them. And then there's Levon, who's sort of like the puppet master that you can't see.

[Michelle McPhee]

This changes everything about the case. But after the break, the feds realize that Jacob and Levon's fraud isn't over. It's about to become even more brazen.

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[Michelle McPhee]

One day in early 2016, there's an alert in the IRS system. A brand new tax credit claim has just been filed by Washakie Renewable Energy and it's a doozy.

[Tyler Hatcher]

It was just an insane amount.

[Michelle McPhee]

Less than two weeks later, a second claim comes in. Once again, it's a staggering amount of money. Together, the two claims are worth ready $644 million more than all the money Jacob and Lavon have stolen so far put together. If these two claims get paid out, it would put the fraud at over a billion dollars. For two supposedly smart criminals, this is a pretty dumb move.

[Narrator/Investigator]

That claim came in when our case was open. Of course we're going to pay attention to it.

[Michelle McPhee]

Believe it or not, someone inside the beige bowels of the IRS is actually about to cut these checks. Before that can happen, though, the agents race to kibosh this audacious attempt. Despite having the Feds on their ass, Jacob and Lavon Frenetically continue scheming, still hoping the big checks will come through in 2016 and 2017. They continue meeting in Los Angeles and flying to Istanbul to see Baran, the man allegedly helping Jacob and Lavon launder the fraud proceeds. Tyler, meanwhile, uses the resources of the federal government to keep tabs on these movements, especially Levan's.

[Narrator/Investigator]

I was tracking his foreign travel. He had access to a couple different private planes.

[Michelle McPhee]

In the midst of all this, Tyler hears from a cooperator that Lavon has flown abroad and returned back to the US which is confusing. If Levan has crossed the border, he should have gotten all kinds of alerts.

[Narrator/Investigator]

I was never notified of those trips. He came and went. I got no heads up. I would, of course, do the data searches and didn't ping anything. No passenger manifests, no indication that he left the country, no indication that he came back.

[Michelle McPhee]

Levan is clearly so well connected he can evade immigration.

[Narrator/Investigator]

Right then I was like, okay, he's got somebody working something somewhere.

[Michelle McPhee]

According to Arthur, the former DOJ prosecutor, Levan's ability to slide out of the country without detection is a massive threat to the investigation.

[Arthur Avenchik]

We knew that these guys had socked all this money away in Turkey, and Turkey has a complicated relationship with the United States. Extraditions out of Turkey are very complicated. And so we knew if these guys go to Turkey, we're in trouble.

[Michelle McPhee]

In the summer of 2017, Levan signals that could be his plan. That June, Levan files a petition with the Superior Court of California to legally change his name. He wants to be known as Lev Aslan Derman. It's a Turkish name. Aslan in Turkish means, you guessed it, lion. But despite the looming danger of Levan slipping away, Arthur and the prosecution team still aren't ready to take down the case. They want to nail down every aspect of the fraud before swooping it. All the while, Jacob and Lavon are still waiting for those half a billion dollar checks from the irs. But if the money comes, Levan will need to justify getting all those millions from Jacob. So he comes up with a nifty plan

[Tyler Hatcher]

as a way to legitimize getting money to Levon. Lavon put a really massive lawsuit on him.

[Michelle McPhee]

If they settle, Jacob will legally have to pay Lavon hundreds of millions of dollars. But there's another reason Lavon sues Jacob. The raids, the subpoenas. Arthur says Lavon thought Jacob's time was running out.

[Arthur Avenchik]

Lavon realizes that the federal government is circling around Jacob Kingston and that they're not going to get away with this. For much longer. He's just doing everything he can to claim that he is in an antagonistic relationship with Jacob. You know, he knows that the gig is up and so he's creating distance.

[Michelle McPhee]

Lavon is becoming increasingly ruthless in his treatment of Jacob.

[Arthur Avenchik]

He's squeezing Jacob Kingston for every penny that he can get. Their conversations are just about, you owe me money, you need to get me the money. Don't talk to me unless it's to give me money.

[Michelle McPhee]

In June 2018, WRE receives a fresh round of subpoenas. Jacob texts Lavon to see if he could come see him the next day. Lavon texts him back, okay, no problem, as long as you bring some money. You owe me. Jacob starts to panic. He's running low on cash and wants Levan's reassurance. More importantly, he needs his umbrella of protection. But Levon's been blowing him off and soon Levon's connections will seem small time. Baron Korkmatz also starts promising Jacob cover from his high powered friends for a fair price.

[Arthur Avenchik]

Korkmaz over in Turkey is demanding $6 million.

[Michelle McPhee]

Jacob testifies that Baran tells him he can even get the former director of the CIA codenamed Grandpa to step in if Jacob pays million.

[Arthur Avenchik]

He's defrauding him.

[Michelle McPhee]

Allegedly defrauding him, that is. Thinking that Baran's connections could be his last shot at deliverance from the law, Jacob tries to scrape the money together.

[Arthur Avenchik]

He's selling everything that he has in order to make those payments. It's a fire sale. The chrome Lamborghini that Lavon term engine gave him, the jewels that he bought for his wife, selling off parts of their biodiesel factory, selling off whatever he can sell for whatever money he can get to send over to Korkmas.

[Michelle McPhee]

It's important to note that Baron Korkmas has been indicted on charges of money laundering and wire fraud by federal prosecutors. But years later, he still hasn't been tried. We've reached out to him for comment, but he never responded. However, he has pleaded not guilty. By selling all his worldly possessions, Jacob manages to send $6 million to Turkey, supposedly for protection. Still, deep down, he senses the gig is up. All his money is gone. That crazy attempt at those $600 million IRS checks never comes through. His company wre is on its knees. People even start getting fired. By August 2018, Jacob is out of options. Which is when he and his first wife Sally do the exact thing the feds have feared the most.

[Narrator/Investigator]

We got information that Jacob and Sally had bought ticket to Turkey. And we're like ah crap. Because we were not ready to take this case at that point.

[Michelle McPhee]

If Jacob goes to Turkey, it could kill the years long investigation. But the feds aren't ready to arrest yet. So what did they do? That's next week on the finale of Kingdom of Fraud. Kingdom of Fraud is produced by novel for iHeart podcast. For more from Novel, visit Novel Audio. The show is hosted by me, Michelle McPhee and produced by Jake Otajevic. It's reported by me and Jake Otajevic. Our assistant producers are Megan Dean and Amalia Sortland with additional production from Myron Kaplan and Liz Sanchez. Our editor is Sandra Shmueli. Production management from Cherie Houston, Joe Savage and Charlotte Wolf. Our fact checker is Fendal Fulton. Sound design and mixing by Mark Pittam. Original music composed and performed by Nicholas Alexander and Daniel Kempson. Music supervision from Jake Otajevic, Sandra Shmueli and Max o'. Brien. Willard Foxen is creative director at Novel. Our executive producers are me, Michelle McPhee, Max O' Brien and Craig Strachan. The Novel and Stephanie Lang. Katrina Norvell and Nikki Etor are the executive producers for IHear podcasts and the marketing lead is Allison Kanter. Special thanks to Carrie Lieberman, Will Pearson and and the whole team at wme.

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