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Hey there, Scamflancers fans want to be the first to know how these wild scams unfold. Join us on Patreon to get early access to episodes, ad free listening, and exclusive content that reveals even more of the drama. Just search for scamfluencers on Patreon and dive deeper into the scandal. We're doing something a little different on Scamfluencers this week. We're sharing an episode from our friends over at Lawless Planet, a show about the scams, murders and cover ups behind the climate crisis. Every week, host Zach Goldbaum tells a new story from the front lines of the battle between people who are either trying to save our world or destroy it. The episode we're dropping today is about an unlikely pair. A leader of a polygamous cult called the Order and an Armenian gangster known as the Lion. Together they looked at a convoluted new system of tax credits for producing gasoline alternatives called biofuels and saw huge loopholes. Then they proceeded to exploit those loopholes to the tune of $1 billion. Yes, that is billion with a B. They thought they had concocted the perfect scam until the FBI and the EPA took them down with the help of a brave young woman who escaped the Order just before an arranged marriage to her first cousin. So here it is. Lawless Planet and a polygamous cult leader's billion dollar biofuel scam.
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It's just before sunrise on June 15, 2013, and Mary Jacobs is tiptoeing through her house in the suburbs of Salt Lake City. She's 17 years old, with long dark hair and expressive eyes. One by one, she peeks her head into her siblings rooms. They're still asleep, but she says goodbye to each of them, unsure when or if she'll see them again. Mary waits for a moment, making sure she doesn't hear her parents coming after her. Then she steps out of the house and runs. Mary declined our interview request, but as she previously told cnbc, there wasn't another chance for me. Like if they caught me, that was it. I would never have another chance to leave. She runs through a darkened backyard, then across a field and finally into a park. There, a 26 year old man in a hoodie is waiting for her. He's Mary's boyfriend, Brian Nelson. He also wasn't able to speak with us, but here he is from the same dock.
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It was kind of the moment of truth. I'm looking at the time, sure enough, I see her running toward me and I go, mary.
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Mary run Run. Come on. Let's go.
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We gotta go.
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Brian rushes Mary into his car. It's her first taste of freedom in days. When her father found out about her relationship with Brian, he put her on lockdown, taking her phone away and forcing her to begin a three day fast. That's because Mary is a member of a secretive polygamous sect known as the Order. And Brian is not. Now she was just days away from being forced to marry another man, her first cousin. But the Order is more than just an offbeat religious group. Some of its highest ranking members are also scammers. A fact that Mary had recently disclosed to Brian. And as they speed off, this is not the end of their troubles. It's the beginning of a chain of events that will culminate in in the takedown of one of the largest renewable energy frauds in US History. From wondry, I'm zach goldaum and this is lawless planet. Each week we tell a new story about the true crimes fueling the climate crisis and the people fighting to save the planet or destroy it.
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These weren't just bad guys like the subjects of Criminal like these were bad guys. They were engaged in massive fraud.
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Results may vary. See chime.com for details and applicable terms. Mom and dad. Mom and Mom. Dad and dad. Whatever. Parents. Are you about to spend five hours in the car with your beloved kids this holiday season? Driving to old Granny's house, I'm set to scene. I'm picturing screaming, fighting back to back hours of the K pop Demon Hunter soundtrack on repeat. Well, when your ears start to bleed, I have the perfect thing to keep you from rolling out of that moving vehicle. Something for the whole family. He's filled with laughs. He's filled with rage. The OG Green Grump. Give it up for me, James Austin Johnson as the Grinch.
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And like any insufferable influencer these days.
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I'm bringing my crew of lesser talented friends along for the ride. With a list guests like Gronk, Mark Hamill and the Jonas Brothers, whoever they are. There's a little bit of something for everyone. Listen to tis, the Grinch Holiday podcast, wherever you get your podcasts. The sprawling spending and tax legislation known as the Big Beautiful Bill took a dagger to the heart of Joe Biden's clean energy program. The bill killed off subsidies for wind and solar and electric vehicle production. But it did preserve and actually expand one so called green energy subsidy. A lesser known tax credit for something called biofuel. Biofuel is made by extracting oil from things like seeds, soybeans, corn, or even used cooking grease and through a chemical process turning it into fuel that can power trucks, planes and heavy machinery. Today we're bringing you a story about the wild world of clean energy tax credits. But trust me, it's a lot crazier than it sounds. It's about an unlikely pair. A polygamous cult leader and an Armenian mobster who took one look at our convoluted system of climate regulations, tax codes and energy incentives and saw dollar signs. Like a whole lot of dollar signs. And it all begins on a rugged patch of land north of Salt Lake City, Utah. The headquarters of the Mormon Church. It's 2006. Jacob Kingston is standing in the shadow of the snow capped Utah mountains on his family's Washakie Ranch. Jacob is a clean cut 28 year old with a messy side part. He's a science nerd and recently graduated from the University of Utah with a PhD in mechanical engineering. His area of expertise producing something called biofuel. This ranch is where Jacob has decided to build his own biofuel plant. He can picture it now. A 123 foot tall seed silo. A state of the art reactor to turn raw material into fuel. A labyrinth of pipes and steel tanks that filter out impurities and turn cooking Oil headed for the garbage. Into hard cash. He'll call his company Washakie Renewable Energy. And in just a few years, Jacob plans to make Washakie the largest producer of clean burning and sustainable biodiesel in Utah, with an annual output of up to 10 million gallons. It is going to be big. It has to be. Jacob desperately needs a way to support his growing family. And it is growing. He already has a few wives and half a dozen children, and he's not done yet. That's because Jacob is a polygamist. After the Mormon Church outlawed polygamy, Jacob's great uncle believed they'd given up their divine authority. So he convinced hundreds of followers to defect. He created a breakaway sect called the Davis County Cooperative Society. To insiders, it was known simply as the Order. On the same land that Jacob plans to build his biofuel plant, his great uncle amassed followers, preaching beliefs that dipped into the occult. He had visions. He healed his disciples by touch. And once, when his favorite wife died, he exhumed her body, cut off her index finger, and carried the bleached bones for the rest of his life, believing they kept her spirit with him. Today, the Order continues to practice Jacob's great uncle's unique brand of fundamentalism. But one important thing has changed. The estimated 5,000 members no longer live on the outskirts of society. They're not sequestered in some gated compound. They're right in the heart of Salt Lake City. They dress like you and me. They run an estimated 300 businesses, and the Order even has a bank. But while everything appears normal, it is far from it. Members shop at Kingston stores. They live in Kingston owned houses and work at Kingston businesses. Instead of paychecks, they get statements where they're credited with minimum wage salaries, and a 10% tithing is deducted. They're convinced that when Jesus returns, God's army will need plenty of money. So all members are required to consecrate their earnings to the church. They can withdraw just what they need to survive. And most of the cult lives on the verge of poverty. But not everyone. In the Order's interpretation of the Book of Revelation, a handful of men in leadership positions are to be stewards of the group's many businesses. These include coal mines and ranches and slot machines and even a rifle company called Desert Tech. And Jacob Kingston is one of those men. Which is why, when he sets out to start his renewable energy business, the pressure to earn comes not only from his large immediate family, but from the Order as well. The biofuel plant would solve all of Jacob's financial problems at home and allow him to contribute to the kingdom of God. And just as he was getting started, a critical piece of legislation was making its way through the United States Congress. And it benefited people with his exact skill set. To Jacob Kingston, it must have seemed like a gift from the Creator himself. After years of debate and division, Congress passed a good bill. It's my honor to have come to the great state of New Mexico to sign it. It's August 8, 2005, and President George W. Bush is at a government owned solar technology facility to sign something called the Energy Policy Act. This bill will strengthen our economy and it will improve our environment. And it's going to make this. It's a rare moment that seems unthinkable today. A Republican politician touting climate friendly legislation that's widely praised by both parties. But before you get all teary eyed and nostalgic for this bygone era of political unity, let me tell you about the bill's crowning achievement. A program called the Renewable Fuel Standard, or rfs. The bill includes a flexible cost effective renewable fuel standard that will double the amount of ethanol and biodiesel in our fuel supply over the next seven years. Using ethanol and biodiesel will leave our air cleaner. And every time we use a homegrown fuel, particularly these will be helping our farmers. Putting the renewable fuel standard into practice is going to take some work. First, if corn and soybean oil are going to replace fossil fuels, the amount of land and water you're going to blow through kind of boggles the mind. But let's put that aside for now, because for the purposes of this story, we're going to focus on the second major implementation. For the program to meet its ambitious goals, it'll need help. A lot of it. So the bill offers lucrative subsidies and tax credits for people converting crops into fuels. The economic system is complicated, but at its most basic level, the government will offer money for each gallon of of pure biodiesel you produce or mix. And to understand how the subsidies work, let's imagine a lemonade stand. The lemons are the raw material, and the lemonade is the processed biodiesel. Now, as you know, lemonade isn't a cash cow. Even the most impressive child hustler can't turn a profit slinging it for 25 cents a pop. Trust me, I've tried. But what if some fat cat helicopter parent swoops in and says, look, for every cup you sell, I'll give you a dollar all of a Sudden, this rinky dink operation is looking pretty legit. Well, that's pretty much how the US government props up the biofuel industry. The thinking is if we can align the market just right, everything else will work itself out. Except it doesn't. Doug Parker is rushing down a marble spiral staircase in the headquarters of the U.S. environmental Protection Agency. He bears a striking resemblance to Hank, the bald DEA agent from Breaking Bad. But as the director of the EPA's Criminal Investigation Division, he's not busting meth rings. Doug and his team are locking up polluters and climate criminals.
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You are literally carrying a gun and a badge when you're on duty. And we would often joke if you look at EPA's seal, it's a big flower. And we would kind of refer to ourselves as the power behind the flower.
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But the work was about to change. On this particular morning, Doug is running late to a meeting when a colleague stops him.
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And he basically said, Doug, this renewable fuels area is going to explode and you really need to get ready for that. This is going to be an area that's significantly vulnerable to fraud.
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So while the renewable fuel standard starts as this well intentioned program promising energy independence and climate friendly fuels, this is what actually happens. Federal officials announced 88 charges in an Indiana based biofuels fraud scheme.
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I will. Man will serve nearly 15 years in prison for a fraudulent biofuel scheme.
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Just last month, a federal jury in Maryland found Rodney Haley of Clean green fuel guilty. Mr. Haley had generated 32 million credits for fuel that never existed.
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Once it's clear that the program has become a magnet for fraud, Doug springs into action. He builds a task force gathering agents with expertise in banking and tax law.
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So think of these as big paper cases. So they're grabbing data, they're looking at random records, they're matching up bills of lading. I mean these are thousands and thousands and thousands of pages of records in these cases. So it's putting these disparate kind of white collar puzzle pieces together through data, records, interviews.
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Parker doesn't want his team simply reacting to fraud anymore. He wants to take a proactive approach.
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You can't do this job in an office. There's probably 40 plus offices around the country in places that you don't necessarily think of Montana and Alaska. We have an office, very productive office in Salt Lake City.
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And when an up and coming biofuel producer out of Utah starts raking in impressive sums of tax credits, the EPA decides to send agents from that Salt Lake City field office on a routine Civil inspection to investigate. By October 2010. It's been four years since Jacob launched his biofuel business. He's now 34 and often wears a crisp navy polo branded with Washakie Renewable Energy's insignia. He's a pillar of the local community, a member of the National Biodiesel Board, and as the owner of a successful business, he's also a high ranking leader within the order. He's hobnobbing with local politicians, and soon Washakie is even advertising at Utah Jazz games and on tv. Sun, Water, Earth. The miracle of our planet is that she seems to take care of us as we take care of her. It's an extraordinary synergy Washakie Renewable Energy is built upon. Washakie is a proud Utah company and leads the Intermountain west in biofuel production. Washakie Renewable Energy providing clean, sustainable energy from used cooking oil and other renewable sources to secure a greener tomorrow, when EPA agents arrive from the Salt Lake City field office, they're given a tour.
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Picture an industrial facility, relatively clean, but tanks and racks to offload areas for trucks to come in. You're on site for a few days, you're evaluating it, you're taking samples. It takes time for those samples to come back. Is this feedstock or is this actually product?
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Doug wasn't on site to inspect Washakie that day, and the EPA declined to offer more details about that particular visit. But one former agent told me that fraudsters often kept what he referred to as an IRS tank while rows of tanks sat empty. That one was filled with other people's fuel and specially prepared for any federal agents who wanted to sniff around. But what we do know is this. By late 2010, even though they were receiving millions of dollars in tax credits, Washakie Renewable Energy hardly processed any biofuel at all. By the time of the EPA inspection, Jacob had been running Washakie Renewable Energy for about four years. But the business was floundering even with the tax credits. Converting the raw material was labor intensive, and he had a 40,000 square foot facility to maintain. To make matters worse, commodity prices had spiked. So shipping soybean oil from the Midwest had become prohibitively expensive. There was simply no way to turn a profit. What was profitable was just pretending to process fuel.
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There were things called ghost loads where they were generating paperwork saying, this is the feedstock that came in, and then we transferred it out after processing.
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In one instance, Jacob teamed up with a company out of Newark, New Jersey, called Biofuels of Colorado. Sounds trustworthy. And Together, they drafted up phony paperwork to make it look like raw feedstock was going to Washakie for processing. It was fraud, and the EPA recognized it right away. According to the violation they issued In February of 2011, no biodiesel was produced at the Washakie facility. Between January 29 and October 15, 2010, the EPA calculated that the fraud resulted in, quote, excess greenhouse gas emissions of more than 30,000 metric tons of carbon dioxide. Yikes. Jacob was hit with a hefty fine. $37,500 for every day he was lying about making fuel. As if business wasn't already hurting enough, he needed a way out. And later that year, he thought he'd found one. It's a brazen scheme, especially for someone who just flunked an inspection. But if it works, it'll be worth it. Instead of processing his own supposedly renewable, environmentally friendly biofuel, he buys somebody else's. Roughly a million gallons for $2.3 million. But he tells the government that it's just cooking oil. Then he ships it to Washakie, pretends to process it himself, and then submits tax credits to the government without having to do any work. And voila. He's earned about a million dollars, a buck for every gallon of fuel he'd lied about processing. At this point, he's made a million back on his original $2.3 million investment. So all he has to do to come out on top is sell the biofuel back on the open market for the same price he bought it for. Easy, right? Not exactly. Jacob makes a deal with a buyer in India and gets the biofuel on a cargo ship. But before the transaction is closed, the client in India goes out of business. It arrives in India, but they refuse to pay Jacob or accept the cargo. Now Jacob is over a million dollars in the hole. To make matters worse, the fuel is going bad. With each passing day, it sits aboard the ship, hundreds of rusting oil drums baking in the hot Indian sun. Who, Jacob wonders, would ever buy nearly a million gallons of rancid, unusable biofuel? Jacob fears he'll not only lose the business, but he'll disappoint the other leaders of the order. He must feel like a sacrificial lamb. And that's when, like a page out of scripture, the lion appears. It's a cold day in January 2012. Jacob is nervously waiting at the small airport near Plymouth, Utah, for a private jet to arrive. A few weeks earlier, he'd been introduced to a man named Lev Aslan. Dermen, his nickname, the Lion. He's a gas tycoon with a shipping company called Lion Trucking and a series of fuel stations and tanks up and down the California coast through his other company, Noil, which is get this lion spelled backwards. Also Lev means lion in Russian and Aslan, his middle name means lion in Turkish. I mean this guy really has a thing for lions. Anyway, the lion had agreed to take the rotting biofuel that that was stuck in India off of Jacob's hands. But before he did that, he asked Jacob if there was any way to just submit it for another round of government biofuel tax credits. Jacob said there was and suggested they could ship it from the Lyons facility in California back to Washakie. That would create the illusion that it was being turned into new biofuel. And that's exactly what they did. Now the lion is coming to meet Jacob to see if they could do it with all over again. The Lion's plane lands, the doors open and the stairs touch down on the tarmac. Out walks a stocky dark haired man flanked by two bodyguards. He has a close cropped salt and pepper beard and a taste for flashy jewelry and overly colorful silk shirts. The lion is rumored to be the leader of LA's notorious Armenian mafia. He is swaggering and fearsome everything Jacob is not and Jacob desperately wants to impress him. So he left his Toyota Tercel at home and rented a Cadillac Escalade, put on a brand new cowboy hat and brought the Lion a gift basket of Armenian fruit. They get into Jacob's car and drive through the mountains into the remote 400 person town of Plymouth where Jacob is running his biofuel plant. When he arrives, the lion is impressed with the facilities and sees potential for an auspicious partnership. Jacob offers the veneer of legitimacy and the lion offers Jacob a standalone distribution network of gas stations where he can ship fuel or at least pretend to. But the lion still needs to feel Jacob out. Can he be trusted? To be sure, the lion invites Jacob and his wife Sally to dinner in Seattle. They hop back on the private jet and take off into the night sky. At dinner at one of the Lion's friends houses, a Russian singer croons while the group parties until 2am Staying up until dawn in a vodka soaked room with an Armenian mobster is kind of out of character for Jacob who is a teetotaling Mormon. As the night winds down, the lion thinks to himself that this partnership might just work. On the way to the airport the next day, the lion wants to get the Kingston family a gift. He asks Jacob if he eats seafood. Jacob says yes. So they stop at a seafood store. Jacob waits in the car while the lion goes inside. A few minutes pass, and when he returns, he's followed by several employees wheeling out 15 boxes of lobster, squid, crabs, clams and oysters. The lion has bought out the entire store, which does seem excessive, but maybe that's just how much squid you need to feed three wives and 20 children. I literally have no idea. But that's beside the point. Now that he's several million dollars and 15 boxes of seafood richer, Jacob bids farewell to the lion. He heeds the Lord's prayer, is led not into temptation, but delivered from evil. He heads home to live with his family in peace and piety. The end. Just kidding. Jacob and the lion are officially in business. Even for a God fearing polygamist, the money is just too good. And it's about to get a whole lot better.
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From the time I was seven years old, I was preparing these financial statements for every single member of the Order. That's Mary Jacobs again in that CNBC documentary about her time in the Order. As I got older, I started preparing the business financials and then I started helping prepare their taxes for their different businesses. That's because Mary Jacob works at the bank. No, this is not Wells Fargo or Capital One. This one belongs to the Order for the Kingston clan. Regular banks just won't do. They simply can't be trusted. By 2013, Mary is 17 years old and and she's been toiling in the Order's financial office for a decade. Yeah, since she was seven years old. But recently, her job has gotten much, much busier. Mary is seeing a flurry of deposits, thanks to the group's top earner, Jacob Kingston. His partnership with the lion has yielded tens of millions of dollars in tax credits. And they're just getting started. Jacob is already in the cult's inner circle, but now he's become the favorite nephew of the Order's boss, Jacob's uncle, Paul Kingston. He's believed to have 40 wives and 300 children. Paul preaches a doctrine called bleeding the beast. The thought is, if the government doesn't let members of the Order live as they please, it is morally justifiable to extract money from the government. Scamming isn't looked down upon. It's a way of life. And when Jacob starts exploiting government incentives and tax credits, no one in the Order bats an eye. When she clocks out of her day job at the Order's bank, one of Mary's brothers drives her to Salt Lake Community College. She's taking night classes in finance, and that's where she meets Brian Nelson.
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I was talking with a friend, and we walked into, like, the study hall, and I saw this woman in the distance, and it was Mary. And I just thought she looked beautiful.
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Mary is taken by Brian, too, but she worries she can never reveal where she comes from. So she lies about her family, about her age, about who she is. Mary also worries she can never leave. She's seen too many cousins who have. In hushed tones, they're referred to as the Lost Boys. Oftentimes, they end up living on the street, completely unprepared for life outside the Order. One night, when she comes home from class, Mary's father tells her he has good news. He's found her a husband. Soon she'll marry her first cousin, one of Jacob Kingston's nephews. It's the summer of 2013 in Plymouth, Utah. The lion and Jacob have been in business together for about a year, and Jacob is back at the town's small local airport. This time, he's with his brother, Isaiah. Isaiah and their mother have been helping with washakie projects, planning shipments, arranging sales, and coordinating with the orders bank. But he's noticed that Jacob has been acting strange. He's wearing a pungent new cologne, dressing in silk shirts, and sporting a $40,000 Ulysse Nardin watch, a gift from the Lion. The Lion's private jet arrives, and Jacob excuses himself while he goes on board to greet his business partner. When he emerges, Jacob is carrying a duffel bag of cash. Jacob finally decides to let Isaiah in on how the business really works. He tells Isaiah those projects that you and mom did were fraudulent. Jacob assures Isaiah that they were protected by something the lion calls the Umbrella. A network of cops and powerful international figures who are on the take. Jacob once saw the lion make a cash payment to an LA county sheriff. And another time, the lion claimed to have protection from a high level federal agent who he called Commissioner Gordon, as in the Batman character. Jacob can't confirm how much cover the Umbrella provides, but he takes a leap of faith. Isaiah, on the other hand, is terrified but intrigued. He wants to know how it all works, so Jacob breaks it down. They call the scam the Rotation. Jacob purchases biofuel and rotates it between buyers and storage facilities around the world. There was the India rotation, the Panama rotation, the Westway rotation between Louisiana and Texas. And at each stop they generate more tax credits. Eventually the biodiesel is sold, then more product is purchased and the whole game starts anew. Once, Jacob and the lion rotated the same 15 million gallons of biofuel so many times that they were able to claim $250 million in tax credits, it all makes Isaiah very nervous. Scamming the government with members of their own tight knit family is one thing, but working with a potentially dangerous outsider is another. Then again, Isaiah does trust his brother. And if he vouches for the lion, that might just be enough for him to take a leap of faith too. It's Pioneer Day, a massive celebration in Utah that commemorates the arrival of Brigham Young. Every year, hundreds of members of the Kingston clan gather for a family picnic. Isaiah is watching his many children, nieces and nephews swim and play on one of the Kingston's beautiful tree lined properties north of Salt Lake. Then Isaiah sees two dirt kicking up along the driveway. A chrome Lamborghini is approaching. It's Jacob, and he's with the lion and his two bodyguards. They've arrived in time for the children's talent show. They all take their seats. The lion sits in the front row with Jacob and Paul Kingston, the leader of the order. Children recite the story of Pioneer Day, when Brigham Young led the Mormons on a 1300 mile sojourn from Illinois to Salt Lake City. When the show is over, kids gather around to ogle at the Lion's car. Parents come and take photos. Jacob and the lion are getting flashy, but this is just the tip of the iceberg. Mary Jacobs and Brian Nelson had been texting and talking relentlessly since they met that night at the study hall. Over the course of those conversations, she slowly begins revealing who she really is. My mom was a fifth wife to David Kingston. And Mary doesn't stop there. She explains how her father went to prison for a decade for secretly marrying his 16 year old niece. How he has 17 wives. How Mary is one of her mother's 15 children. And my dad has over 300 kids in the Salt Lake Valley. And he's just one person in the Order. For Brian, it's a lot, but he's still committed to Mary. And they keep talking until one day, Mary stops responding to him. She stops showing up to classes. And then out of the blue, Brian gets an email.
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It's saying, I'm sorry, I was found out that I was talking to an outsider. They want me to marry somebody.
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Within two weeks, Mary's brother, who had been chaperoning her to class, had found out about Brian and ratted her out. Now she's been on lockdown, unable to leave the house, watched nearly round the clock. And I immediately responded.
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And I said, mary, let's get you out. Let's plan your escape.
- [36:25]
B
Mary's mind is running. Could she really leave the only life she's ever known? Not only could her family disown her, but she fears the Order would come after Brian too. Still, she puts her concerns aside for now and they begin to plot her escape. At the same time, Brian is coming up with a plan of his own. Because beyond what Mary divulged about her immediate family, she also confessed to Brian that she knows one of the group's brains biggest secrets. As an employee of the Order's financial office, she observed millions of dollars being shuttled between accounts, forged contracts, and fraudulent tax returns. Mary is aware of the money circulating between the Order's businesses, including one called Washakie Renewable Energy. By 2014, the scam has gone into overdrive. Jacob and the lion rent enormous shore tanks in Houston, Texas, that can hold millions of gallons of fuel. They rent barges and more shore tanks in Louisiana. And for the next several months, they transport fuel back and forth between Houston and Louisiana. And as the credits roll in, Jacob and the lion go on a spending spree. Jacob gifts The Lion a $1.8 million Bugatti. The pair go in on a plot of land in Belize to build a casino. And they fund a Haitian American rapper's clothing line. They fly in private jets and take lavish trips, often to Turkey. And one of those trips happens after Jacob's son's wedding. They land in Istanbul, and the lion is there to greet Jacob, Isaiah and a dozen or so other family members. He escorts them to a dock on the Bosphorus, where a yacht is waiting for them. They set sail for the Mediterranean. Istanbul. Glistening in the distance, the Kingstons party into the early hours. As a man in a leadership position in the cult, Jacob is given more leeway with how he behaves and spends his money. He lives the high life, while other followers live in poverty. He enjoys the luxuries of the modern world, while other followers live modest, pious lives. The Lion's ties to Turkey run deep. At one point, he introduces Jacob Kingston to Turkish president Recep Tayyip Erdogan. And another time, he offers Jacob a suggestion. They're earning a lot, he says, and they need a way to secure that money in case the feds ever start sniffing around. Jacob has invested about $30 million in the order's financial office. Another several hundred million is shared between the Washakie coffers and Jacob and the Lion's web of personal accounts. But over time, the lion encourages Jacob to transfer more than $130 million to bank accounts in Turkey. Some of that money, the lion continues, will be funneled to the CIA for clandestine operations in Turkey. It's yet another insurance policy, part of the umbrella that the lion promised. It may be all smoke and mirrors, but Jacob is in too deep and has no choice but to trust the plan. If he loses his protection, the operation is over. He agrees to start funneling the money to the Lion's offshore accounts. It's a con within a con, and it appears that the lion is planning to make off with Jacob's cut. But with tax Credits filed for $644 million and friends in high places, Jacob Kingston probably feels untouchable, like a God amongst men. But had he adhered to his own beliefs, he would know that self worship all but guarantees self destruction. In 2014, EPA agents from Doug Parker's team are beginning to construct a murder board of biofuel companies, all of whom have committed some sort of fraud.
- [40:37]
C
It takes other companies externally to cooperate to commit this fraud. So we'll typically work our way in from not just the bottom up, but from the outside into these other companies. They're facing criminal liability. Once we demonstrate the amount of knowledge we have on them, they have the ability to put themselves in a position where they can actually perhaps become cooperators, which is sometimes hard because again, these are organizations that are in many cases led by fear and loyalty agents.
- [41:05]
B
Hone in on a number of companies from Los Angeles, another in Washington state. Then there's one company out of Newark, New Jersey, confusingly called Biofuels of Colorado. Doug's team begins to see a pattern. They've all collaborated with one wildly successful operation out of a tiny town in Utah that the EPA inspected three years earlier. Washakie Renewable Energy. Washakie had been on the radar of the EPA and the IRS since their first civil inspection in 2010. But this was about to become a criminal matter. That year, Washakie submitted over $160 million in tax credits, which means they're either the best biofuel manufacturer in the American west or something is amiss.
- [41:54]
C
When we talked about tax credits, that's the domain of the irs, financial fraud. So then we brought in our other law enforcement partners.
- [42:02]
B
After the irs, the EPA reaches out to the FBI, alarm bells are ringing because they too have received a tip about Washakie, thanks to none other than Mary Jacobs and Brian Nelson. Just a few weeks earlier, In January of 2014, Mary and Brian were in the Salt Lake City office of the FBI. For two hours, they walked agents through the complex scheme that Mary witnessed in her time in the Order's financial office. She provided law enforcement with maps of the Washakie offices and detailed information about where Jacob Kingston stored documents. She even gave agents information about other members of the Order she believed were vulnerable and could be turned into informants. When Mary and Brian left the office that day, they felt assurance that something was happening. They were ready to move on with their lives and got married. In a small, secret ceremony, Mary takes Brian's last name, Nelson. And for a moment, they think they've turned a page on their old life. But the moment is fleeting. Over the course of the next year, they're followed. Here's Brian in another documentary from Paramount.
- [43:20]
C
So it began with just like cars parked down the street, right? Just watching us. And every single time I approached them.
- [43:25]
B
They would ride away.
- [43:27]
C
People driving by, taking pictures of our place.
- [43:29]
B
Mary has no idea if the Order knows that she's talking to the FBI or if she's simply being punished for defecting. But she's scared. She knows that one of the Order's leaders went to prison for beating his own daughter after she fled an arranged marriage to her uncle, as in her dad's brother. She knows the Order manufactures their own firearms under the Desert Tech brand, and she fears that they have little regard for the law. Less than a year after Mary and Brian eloped, they're getting ready for bed one night when a brick flies through their window. The next day, they pack up and leave Salt Lake City. The Nelson family relocates five times in a year. And while they're on the run, the EPA begins coordinating with their partners in the irs, Homeland Security, and now the FBI. They're closing in on the Kingstons and the Lion. It's 8am On February 10, 2016, about two years since the EPA and the FBI began investigating Jacob and the Lion. During that time, they've continued to exploit biofuel tax credits. That morning, Jacob is in bed with one of his three wives, Sally, in their $3 million mansion. Suddenly, the front door bursts open and IRS, EPA and Homeland Security agents storm inside.
- [45:01]
C
Ultimately, the search warrant went down.
- [45:03]
B
That's EPA Criminal Investigations Division director Doug Parker again.
- [45:08]
C
People are showing up in badges, guns and raid jackets and body armor.
- [45:12]
B
The agent sees computers and cell phones. But as they sift through filing cabinets in search of documents that confirm the fraud, there's nothing. They come up empty handed. The bust is a failure.
- [45:27]
C
There was concern of tipping off the folks ahead of time, and I don't know what happened in this, but sometimes you have to be really thoughtful about whether there could be a connection between certain local folks who become aware of it.
- [45:42]
B
Days earlier, Jacob had called his employees and told them to start destroying evidence of illegal activity and anything related to the Lion. The office had received a call from someone from the Salt Lake City IRS office saying they're coming next Wednesday with warrants. The umbrella Jacob thought was working. But how long could it hold? Two days after the raid, Jacob arrives in Las Vegas, Nevada. He walks across the plush red carpeted lobby of the Wynn Hotel and rides the elevator to the penthouse suites. There the lion is waiting, but the energy is suddenly icy. The lion tells Jacob to strip. He needs to be sure Jacob is not wearing a wire. The lion tells Jacob he needs to be more careful, that they're under the microscope for now at least. But if Jacob follows the Lion's instructions, they'll be safe. First, he needs to drain his bank accounts and start selling his possessions. He needs to send all of his money to Turkey where it'll be safe and where Jacob is beginning to think he'll have to spend the rest of his days. As Jacob trembles in his underwear, the lion reassures him. My boys will look into it, he says, and take care of everything. Stay strong and keep your feet planted. When Jacob leaves, the lion makes a call. On his payroll is an FBI agent. The lion asks the agent to sift through the FBI's data bank to check if he's on their radar. And it turns out he is. It's August 23, 2018, more than two years since the raid on Jacob's house and Washakie's facility. Members of Doug Parker's team are positioned at the Salt Lake City airport. Other federal agents from the irs, FBI and Homeland Security are stationed at various points of entry. They watch as Jacob's wife Sally, his sons and their wives board a plane. But Jacob is nowhere to be seen. After failed raids of his offices and home, the agents worry that he slipped through their grasp again. Then Jacob, now 42 years old, appears walking over the skybridge. A ticket for a KLM flight that will eventually take him to Istanbul is in his hand. But as he approaches the gate, agents suddenly swarm him and announce they have a warrant for his arrest. He's never going to get a chance to board that plane or relocate to Turkey. Meanwhile, at the same time in Los Angeles, the Lion is getting off a plane from Turkey. Another batch of federal agents are there ready to take him away. By the end of the day. The almighty plan. Polygamous scammer Jacob Kingston and his Armenian mafia partner, the lion, are behind bars. For EPA agent Doug Parker, the case was a triumph.
- [48:51]
C
I mean, these were folks who were running true criminal enterprises, ripping off the taxpayer for millions. I felt for the team who did all the work. I don't want to take any credit, dozens of people were part of this, but I thought it was incredibly impressive result.
- [49:09]
B
Jacob and his brother Isaiah pled guilty and received 18 and 12 years respectively. One of Jacob's wives, Sally and his mother also took plea deals. Lev the Lion, German, took his case to court and got 40 years. And as for the so called Umbrella, well, of all the lies and deceptions the lion orchestrated, it seemed like there might have been a kernel of truth in this one. The crooked FBI agent who tipped them off, a Homeland Security agent, a local narcotics detective, all landed in prison for their involvement with the Lion. In the end, Jacob Kingston and the lion submitted a billion dollars in claims, more than 500 million of which was paid out. And while they may have orchestrated the biggest and perhaps most audacious biofuel scam in history, they are not alone. The EPA says this entire cadre of scammers has carried out the most significant series of frauds on the environment ever prosecuted. But here's an uncomfortable truth. As much as we may want to place blame solely on the scammers, it may have been the renewable fuel standard itself that screwed taxpayers and the environment the most. The program promised it would reduce greenhouse gas emissions, but study after study say that it may have done the opposite to produce the raw material you need for biofuel, fertilizer use and water pollutants have surged and vast swaths of habitat have been transformed into croplands. Today, farmland the size of New York State is used solely to produce corn ethanol, and 40% of soybeans grown in the US are used for biodiesel. And despite that huge footprint, we're not even using it. Only 4% of the fuel we use is corn ethanol and less than 1% is soy biofuel. So while it definitely burns cleaner, biofuel has ended up producing even more emissions than regular gasoline. And this is the so called renewable fuel that the Trump administration will continue to subsidize. The US Government wanted this program to work so badly that they engaged in some serious magical thinking. They thought that they could somehow produce more fuel and lower greenhouse gas emissions at the same time. And in that way, they're not unlike Jacob Kingston, who thought he could walk the righteous path and make money like a gangster. At some point there's gotta be a trade off, and no one understands tradeoffs better than Mary Nelson. U.S. attorneys I spoke to for this story said they could never have prosecuted this case were it not for the brave testimony of insiders like Mary. But her cooperation meant saying goodbye to her family and the only world she had ever known. They're going to feel betrayed and I know that they are not going to understand why I'm in this position and why we're doing what we're doing. But I know that one day they will.
- [52:21]
A
Loving scamflancers get exclusive episodes and early access to new ones all ad free on Wondry Plus. Join now in the Wondry app, Apple Podcasts or Spotify. Before you go, help us out by taking a Quick survey@wondry.com survey.
- [52:42]
B
On the next episode of Lawless Planet. For decades, New York's trash industry was run by the mafia. What happened when it all came crashing down? If your customer thought you were a gangster, good. So be it. We use a lot of resources when rescue researching these stories and for today's episode we really recommend Vince Beiser's reporting in Wired. It's called the lion, the Polygamist and the Biofuel Scam, as well as CNBC's American Greed and Paramount's the Whistleblower, which is where that tape of Mary and Brian Nelson came from. Lawless Planet is written, produced and hosted by me, Zach Goldbaum. Our senior producer and senior story editor is Derek John. Senior producers for wondery are Peter A.R. cooney and Andy Herman. Our senior senior managing producer is Nick Ryan. Our managing producer is Sarah Kenny Corrigan. Our associate producer is Lexi Piri. Sound design by Marcelino Villalpando and Jamie Coopar. Music by Kenny Kuziak. Our music supervisor is Scott Velasquez. For Frison Sync. Fact checking by Brian Punyatt. Our legal counsel is Deb Droze. Executive producers are Marshall Louie, Aaron o' Flaherty n' Eaton and Jenny Lauer. Beckman for Wondery. Thanks for listening. Listening. We'll see you next week.