Noil Energy Owner Found Guilty of $1 Billion Biodiesel Tax Fraud
Offen Petroleum to Acquire Bosselman Energy
Parkland to Acquire ConoMart, Mort Distributing in Montana

NOIL ENERGY OWNER FOUND GUILTY OF $1 BILLION BIODIESEL TAX FRAUD

SALT LAKE CITY, UT. — A federal jury has convicted California businessman Lev Aslan Dermen, also known as Levon Termendzhyan, of criminal charges relating to a $1 billion renewable fuel tax credit fraud scheme.

Dermen was the owner and operator of Noil Energy Group, a fuel retailer based in Commerce, CA., as well as Viscon International, a Nevada fuel additive corporation, and SBK Holdings USA, a Beverly Hills real estate investment company.

The charges against Dermen stated that from 2010 to 2016, Dermen conspired with the owners and operators of Washakie Renewable Energy to fraudulently claim more than $1 billion in renewable fuel tax credits from the IRS.

Also charged with tax fraud was Washakie CEO Jacob Kingston; his brother, CFO Isaiah Kingston; and others including their mother, Rachel Kingston, and Jacob Kingston's wife, Sally.

As part of their scheme, Dermen and Jacob Kingston shipped millions of gallons of biodiesel within the U.S. and from the U.S. to foreign countries and back again to create the appearance that qualifying renewable fuel was being produced and sold. They also doctored production and transportation records to substantiate Washakie's fraudulent claims for more than $1 billion in IRS renewable fuel tax credits and credits related to the EPA renewable fuel standard.

To further create the appearance they were buying and selling qualifying fuel, the co-conspirators cycled more than $3 billion through multiple bank accounts.

As a result of the fraudulent claims, the IRS paid more than $511 million to Washakie and the Kingstons that was distributed between them and Dermen.

At the trial, prosecutors reported that Dermen and Jacob Kingston laundered $3 million through Dermen's company, Noil Energy Group, to purchase a mansion in Sandy, Utah for Jacob Kingston and his wife Sally. Dermen also laundered $3.5 million through his California company, SBK Holdings USA, Inc., to purchase a mansion in Huntington Beach, California for himself.

Jacob Kingston also used $1.8 million of the fraud proceeds to buy Dermen a 2010 Bugatti Veyron, and they exchanged gifts including a chrome Lamborghini and a gold Ferrari.

Throughout the scheme, Dermen assured Jacob Kingston that they would be immune from criminal prosecution because they would be protected by Dermen's "umbrella" of corrupt law enforcement personnel. Jacob and Isaiah Kingston testified they transferred over $134 million in fraudulent proceeds to companies in Turkey and Luxembourg at Dermen's direction, in purported payment for protection.

"The defendants claimed both EPA Renewable Fuel Standard (RFS) program credits and IRS tax credits for biodiesel fuel that did not exist, defrauding taxpayers out of hundreds of millions of dollars," said Lance Ehrig, EPA Acting Special Agent in Charge. "With this action EPA and its enforcement partners are continuing to protect both the integrity of the RFS program and the American taxpayer."

The Kingstons each pleaded guilty on July 19, 2019 for their role in this scheme and testified in the seven-week trial of Dermen.

The jury found Dermen guilty of conspiracy to commit mail fraud, conspiracy to commit money laundering, and money laundering concealment money laundering, and expenditure money laundering.

U.S. District Judge Jill N. Parrish will set Dermen's sentencing at a later date. At sentencing, he faces a maximum sentence of 20 years in prison for conspiracy to commit mail fraud, conspiracy to commit money laundering, and concealment money laundering, and 10 years in prison for expenditure money laundering. He also faces a period of supervised release, restitution, and monetary penalties.

"This trial was the culmination of years of investigative effort that traced money through a variety of countries and states through a complicated fraud scheme to eventually put money in the pockets of Mr. Dermen," said Don Fort, chief of IRS Criminal Investigation. "The complicated nature of the scheme shows the determination with which the defendants had to defraud the American public for the sole purpose of lining their own pockets."

As part of their plea deals, Isaiah Kingston faces 20 years in prison and Rachel Kingston and Sally Kingston each face 15 years in prison. Jacob Kingston has yet to be sentenced but faces a maximum of 30 years in prison. The Kingstons are also ordered to pay $511 million in restitution to the United States and to forfeit the proceeds of their crimes.

The verdict against Derman was handed down on March 16 in Salt Lake City.

OFFEN PETROLEUM TO ACQUIRE BOSSELMAN ENERGY

DENVER, CO. — Offen Petroleum has signed a deal to acquire the business assets of fuel distributor Bosselman Energy and Bosselman Carriers, their trucking company, both based in Nebraska. The purchase price was not disclosed.

Following the close of the acquisition, the Bosselman office in Grand Island, NE., will become a regional operations center and the bulk plants will remain open and operate under the Offen Petroleum name.

Bosselman Enterprises, which includes Pump & Pantry, truck stops and hotels, is a separate company from Bosselman Energy and Carriers and is not being acquired by Offen.

"This transaction affords us the opportunity to strengthen our Colorado operations while expanding into new geographies and business lines. Nebraska, Kansas and Iowa are adjacent to our core footprint, allowing us to work with our existing suppliers in new territories," said Bill Gallagher, CEO of Offen Petroleum, announcing the deal.

Offen is a portfolio company of Court Square Capital Partners, marketing motor fuel, lubricants, and petroleum logistics services in Colorado and 15 surrounding states.

PARKLAND TO ACQUIRE CONOMART, MORT DISTRIBUTING IN MONTANA

BILLINGS, MT. — Parkland USA has signed a deal to acquire seven retail sites located in the Billings, MT., area from ConoMart Super Stores. The purchase price for the stations was not disclosed.

The stations, all operating under the Conoco brand, are located in Billings, Laurel, and Joliet, MT. All "feature a strong convenience store offering," according to Parkland.

"This acquisition expands our Montana business and scales our existing Northern Tier Regional Operating Center," said Doug Haugh, president of Parkland USA, announcing the deal. "ConoMart Super Stores is a well-run, customer-focused business and we look forward to welcoming the team to Parkland."

"Our team has been successful in serving our loyal retail customers throughout the years, and this opportunity is a natural next step to our growth," said Dennis Whitmore, president of ConoMart Super Stores. "I've been highly impressed with Parkland, its values and culture throughout this process. They have made taking care of our employees and customers their highest priority."

Parkland's holdings in southern Montana included wholesaler Farstad Oil; the company will now have retail offerings in the territory with the acquisition.

The acquisition comes on the heels of Parkland's acquisition of Mort Distributing of Glendive, MT., in a deal that was announced at the end of 2019.

Founded in 1958, Mort was a family-owned marketer and distributor of fuels and lubricants in Montana, Wyoming, Idaho, North Dakota, and South Dakota. Cole Mort, the third generation working in the business, has joined the staff at Parkland.

"Evelyn and I are excited about retirement and knowing our employees are being taken care of by Parkland USA," said Tim Mort, who was serving as president of Mort Distributing at the time of the sale. "They will have an opportunity to move up and grow with a larger corporation and our customers will be treated with the same excellent customer service they currently get, which will make retirement better."

Originally published in the April 2020 issue of O&A Marketing News.
Copyright 2020 by KAL Publications Inc.