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SALT LAKE CITY —Two biodiesel executives with ties to a northern Utah polygamous group will remain jailed ahead of trial on charges they carried out a $500 million tax credit scheme.
A defense attorney for one of the businessmen said prosecutors' claims his client would flee to Turkey, hide using the polygamous group's vast resources or try to harm witnesses if he is released are false and based on weak evidence.
"It's outrageous," the attorney, Scott Williams, said at a hearing in Salt Lake City's U.S. District Court Wednesday.
Federal Magistrate Judge Brooke Wells was not persuaded. She declined to release his client Isaiah Kingston, chief financial officer of Washakie Renewable Energy, who is due back in court Friday for a similar hearing.
Williams said the state has left out key details about his client's cooperation in a jury investigation. It drummed up allegations based on questionable evidence that unfairly links him to his brother's alleged criminal behavior, he said, at times relying on third-hand hearsay.
Isaiah Kingston's brother, Washakie CEO Jacob Kingston, also is charged in the fraud case, but his attorney did not ask for his release ahead of a Sept. 5 detention hearing. He was on his way to the airport in Salt Lake City to fly to Turkey with his family when he was arrested, prosecutors wrote in a court filing unsealed Tuesday.
The pair have pleaded not guilty to charges of fraud and money laundering. They sat quietly in blue jail uniforms as they watched the hearing.
Federal prosecutors say both men are a flight risk, with equal stake in their company and access to $134 million in investments in Turkey.
They argued Wednesday that the two own a private airline and destroyed business records after someone tipped them off that federal officers would raid their offices in February 2016. Investigators don't know how the pair found out, according to court documents, but a witness alleged a federal agent issued the warning.
Williams countered that his client does not have access to a private jet and has only taken a ride on one once, and that he no longer has access to Washakie money. Prosecutors in the two years since the raid have not charged the men with obstructing justice, he said.
They said the two might try to hide by using businesses and homes available to them through the Davis County Cooperative Society, or the Kingston Order, which practices polygamy. After the hearing, Williams rejected the claim, saying the pair's ties to the community are not relevant to the case.
Justice Department trial attorney Leslie Goematt said a government witness in the case has gone into hiding after receiving death threats.
A federal grand jury indictment unsealed Friday accuses the executives of creating fake records from 2010 to 2016 in order to obtain the federal tax credits, then laundering the money. The company at the time billed itself as a premier producer of biodiesel and chemicals.
Though the men netted roughly $500 million in fraudulent credits, the state alleges they intended to take in more than $1 billion. In addition to trying to distance his client from his brother, Williams said Isaiah Kingston faces severe health problems.
He has lost significant weight since he was jailed Friday and has cancer, ulcerative colitis and Crohn's, the inflammatory bowel disease, Williams said. What's more, his wife is pregnant is due to give birth at "any time."
Isaiah Kingston's body trembled visibly in the courtroom as his attorney listed his health problems and explained that he takes holistic medicine.
