By all appearances, a California businessman was running a very successful business. Lev Aslan Dermen, also known as Levon Termendzhyan, owned a mansion in Huntington Beach and enjoyed a lavish lifestyle. In reality, the government claims he was not a successful businessman but instead a criminal who was illegally profiting through tax fraud.
Government builds a case — claims tax fraud and other crimes
The prosecution accused the businessman of bilking the biofuel tax credit program. According to the indictment, the accused claimed Environmental Protection Agency (EPA) Renewable Fuel Standard (RFS) program credits along with Internal Revenue Service (IRS) tax credits for biodiesel fuel that did not exist.
Case moves forward — jury to hear arguments
The case went to trial. During the seven-week trial, the prosecution stated the accused conspired to fraudulently claim over $1 billion in renewable fuel tax credits from the IRS. The IRS offers these credits to encourage the use of more environmentally friendly resources. The government claimed the accused shipped biodiesel fuel to various businesses within the country, oversees and then back again — making it appear as if additional fuel was purchased when it was really just the same fuel. The business owner would then doctor documents to substantiate the transactions and support the claim for the renewable tax credit.
The government states these actions resulted in $511 million to those involved in the scheme. The government also claims the accused took actions to separate the funds from the transactions, supporting further criminal allegations of money laundering. Ultimately, the government charged those involved with the scheme with multiple crimes including mail fraud, money laundering, filing of false claims with the IRS, and conspiracy to obstruct justice.
Jury rules in favor of government — accused appeals
The jury found the accused guilty of conspiracy to commit mail fraud, conspiracy to commit money laundering, and money laundering concealment money laundering and expenditure money laundering. The court has postponed sentencing for a later date. He faces up to thirty years imprisonment for these convictions.
Mr. Dermen is planning an appeal. According to a statement from his team, there are concerns the jury may have felt rushed and uncomfortable due to the current coronavirus pandemic. He stated jurors were wearing masks and at least two were excused from the trial after developing “pneumonia-like symptoms.” As a result, he is hopeful he will get a new trial.