Episode Overview

Theme:
This episode of Scamfluencers (cross-posted from the podcast Lawless Planet) dives into one of the largest renewable energy frauds in U.S. history—a billion-dollar scam masterminded by Jacob Kingston, polygamist cult leader of Utah’s “Order,” and Lev Aslan Dermen (aka "the Lion"), an Armenian gangster. The episode traces their rise, the complicated web of deception exploiting biofuel tax credits, and the roles of insiders and law enforcement in their downfall.

Key Discussion Points & Insights

1. The Great Escape and Inside the Order (01:35–04:09, 28:14–29:50)

• Mary Jacobs’ Escape:
  The episode opens with the suspenseful escape of 17-year-old Mary Jacobs from her fundamentalist family, barely avoiding a forced marriage to her cousin. Her story becomes the thread that ultimately unravels the scam.

  "[...] there wasn't another chance for me. Like if they caught me, that was it. I would never have another chance to leave."
  — Mary Jacobs, quoted from CNBC (01:56)

• Life in the Order:

  • The Order, a fundamentalist breakaway Mormon sect, operates hundreds of businesses and has its own bank.
  • Members work in group businesses, receive minimum wage credits (not real pay), and surrender nearly all earnings.
  • High-ranking men, like Jacob Kingston, become stewards, funneling earnings back to the sect’s coffers.

• “Bleeding the Beast” Doctrine:
  Paul Kingston, the Order’s boss, preaches that it’s morally right to scam the government—a vital rationalization behind the group’s criminal ventures.

2. Biofuel Tax Credits: The Perfect Loophole (06:01–16:30)

• Laws Meant for Good, Turned Bad:
  The 2005 Energy Policy Act under President Bush introduced incentives for renewable fuels. The Renewable Fuel Standard promised to cut emissions by subsidizing corn- and soy-based fuels.

  "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."
  — Zach Goldbaum (09:49)

• Huge Government Subsidies:
  The tax system pays out per unit of biofuel “produced”—a model easily exploited.

3. The Scam: How It Worked (16:53–27:00, 30:35–41:05)

• Ghost Loads and Fake Production:

  • Jacob Kingston’s Washakie Renewable Energy claimed to process millions of gallons of biofuel that didn’t exist, using paperwork tricks like “ghost loads.”

  • When the EPA caught on after an inspection, they fined Washakie for “excess greenhouse gas emissions of more than 30,000 metric tons of carbon dioxide.” (19:19)

    "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."
    — Doug Parker, EPA Criminal Investigations (19:41)

• The Lion’s Entrance and the “Umbrella” (21:31–29:50, 30:35–35:50):

  • Lev Dermen (the Lion), a flashy Armenian kingpin, partners with Jacob after buying his spoiled fuel stuck in India.
  • Together, they launch “the Rotation”—buying and “moving” the same fuel through multiple locations and generating multiple sets of tax credits.
  • The Lion claims protection from “the Umbrella”: crooked law enforcement and government insiders, providing cover for the operation.

• Vast Profits, Flashy Spending:

  • They claim credits worth hundreds of millions and launder money through Turkey, investing in casinos, cars, and luxury goods.

    "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..."
    — Zach Goldbaum (32:55)

4. The Whistleblower: Mary Jacobs’ Pivotal Role (28:14–29:50, 42:02–43:08)

• Financial Insider:
  From childhood, Mary manages the sect’s financials, noticing mysterious new deposits linked to Jacob’s success.

  "From the time I was seven years old, I was preparing these financial statements for every single member of the Order."
  — Mary Jacobs, CNBC (28:15)

• Trust and Risk:
  Mary slowly confides in Brian Nelson, an outsider, about internal fraud, putting herself in grave danger.

• Turning Evidence:

  • In 2014, Mary and Brian cooperate with the FBI, giving detailed maps, contacts, and insight into the network’s secrets.
  • Their testimony would prove central to the prosecution.

5. The Investigation Unfolds (14:53–18:31, 40:37–43:08)

• EPA Criminal Investigations:
  Agents led by Doug Parker identify Washakie as a key cog in a web of fraudulent biofuel producers.

  "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."
  — Doug Parker (14:53)

• Proactive Enforcement:

  • Inspections and fines fail to deter the operation.
  • Investigator teams from EPA, IRS, FBI, and Homeland Security unite; informants and paper trails build the case.

6. Downfall: The Sting and Justice (45:00–49:23)

• Botched Raid and Umbrella Shield:

  • In 2016, a major raid on Jacob’s mansion is foiled—evidence had been destroyed following an IRS tipoff, likely from a corrupt contact.

  • Jacob and The Lion scramble to liquidate, funneling funds overseas.

    "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."
    — Doug Parker (45:27)

• Arrests and Sentencing:

  • Jacob is caught en route to Turkey; The Lion is arrested in LA.

  • Jacob and brother Isaiah take plea deals (18 and 12 years); The Lion is convicted at trial (40 years).

  • Several law enforcement and government agents involved in the “Umbrella” are also sentenced.

    "Lev the Lion...got 40 years. And as for the so-called Umbrella...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."
    — Zach Goldbaum (49:08)

7. The Aftermath: Broken Systems and Broken Lives (49:23–52:21)

• A System Ripe for Corruption:

  • The Renewable Fuel Standard, designed to help the environment, led to vast fraud, questionable emission reductions, and massive subsidies for little actual impact.

    "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."
    — Zach Goldbaum (49:23)

• Mary’s Price:

  • Mary Nelson's testimony was essential; she lost her family and sense of belonging for the sake of truth.

    "But her cooperation meant saying goodbye to her family and the only world she had ever known...But I know that one day they will."
    — Mary Nelson (52:09)

Notable Quotes & Memorable Moments

• The Vulnerable System:

  "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."
  — EPA Colleague to Doug Parker (15:14)

• On the ‘Power Behind the Flower’:

  "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."
  — Doug Parker (14:53)

• On Escalation:

  "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."
  — Zach Goldbaum (34:01)

• On Cult Motivation:

  "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."
  — Zach Goldbaum (28:54)

Timestamps for Major Segments

| Timestamp | Segment Description | |------------|--------------------------------------------------------------------------| | 01:35–04:09| Mary Jacobs’ escape & her ties to the Order | | 06:01–16:30| History and loopholes of the Renewable Fuel Standard | | 16:53–19:41| EPA inspections, ghost loads, and the start of the fraud | | 21:31–29:50| Jacob meets “the Lion”; formation of the umbrella and Rotation scam | | 28:14–30:35| Mary’s insider knowledge and her relationship with Brian | | 30:35–36:05| Building the scam; family involvement; “Bleeding the Beast” | | 40:37–43:08| Feds close in, Mary and Brian become informants | | 45:00–46:00| Botched raid and last-minute coverup | | 48:50–49:50| Arrests, sentences, and the collapse of the operation | | 49:23–52:21| Systemic failures, Mary’s sacrifice, and environmental fallout |

Final Thought

Lawless Planet presents a sobering true tale of innovation gone awry and the human costs of both fraud and whistleblowing. It's a compelling illustration of how well-intentioned government programs and closed communities can become petri dishes for epic scams—especially when greed, ideology, and poor oversight mix.