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United States v. Kingston

United States District Court, D. Utah

March 14, 2019

UNITED STATES OF AMERICA, Plaintiff,
v.
JACOB KINGSTON, ISAIAH KINGSTON, LEV DERMEN, RACHEL KINGSTON, and SALLY KINGSTON, Defendants.

          MEMORANDUM DECISION AND ORDER CONTINUING TRIAL AND DENYING MOTIONS FOR REVIEW OF DETENTION

          JILL N. PARRISH UNITED STATES DISTRICT COURT JUDGE.

         The Government has charged Jacob Kingston, Isaiah Kingston, Lev Dermen, Rachel Kingston, and Sally Kingston with a variety of offenses related to an alleged scheme to illegally obtain over $500 million in renewable fuel tax credits. Jacob, Isaiah, and Lev have been detained pending trial since their initial appearances on August 24, 2018. Rachel and Sally were added to this case on January 22, 2019 and have been granted pretrial release. A trial for Jacob, Isaiah, and Lev is currently scheduled for May 13, 2019.

         Before the court is a motion filed by Rachel and Sally to continue the trial and set a combined trial date for all five defendants for July 25, 2019. [Docket 185]. Jacob stipulates to the motion. Isaiah and Lev oppose the motion. The court GRANTS the motion to continue the combined trial and sets a firm trial date of July 29, 2019.

         Also before the court are motions for review of detention filed by Isaiah and Lev. [Docket 189, 208, 226]. These defendants argue that new information and due process concerns require their release from detention pending trial. The court DENIES the motions for review of detention.

         Finally, the court also reviews the detention status of Jacob, Isaiah, and Lev under 18 U.S.C. § 3164. Pursuant to this statute, the court determines that these defendants shall remain in detention until the completion of the combined trial.

         I. CONTINUANCE OF THE TRIAL DATE AND EXCLUSON OF TIME

         A. Findings of Fact

         Based upon all of the filings of the parties in this case, the evidentiary hearings before Judge Wells, and the hearings held on February 19, 2019 and March 4, 2019, the court makes the following findings:

         1. The Government alleges that the defendants engaged in a complex and multi-year fraud scheme to defraud the United States out of more than $511 million in renewable fuel tax credits. The Government also alleges that the defendants laundered the proceeds of the scheme.

         2. On August 1, 2018, the Government filed a sealed indictment as to Jacob, Isaiah, and Lev. On August 23, 2018, Jacob and Isiah were arrested in the District of Utah. On the same day, Lev was arrested in the Central District of California. These defendants were ordered to be detained pending trial. On September 4, 2018, a magistrate judge in the Central District of California ordered that Lev be removed to the District of Utah.

         3. On September 18, 2018, this court denied Isaiah's motion for review of his detention. The court found that Isaiah had both a motive and the means to flee the country and determined that there was no combination of conditions that would reasonably assure his appearance at trial.

         4. On October 9, 2018, this court also denied Lev's motion for review of his detention. The court similarly found that Lev was a flight risk and that no combination of conditions would reasonably assure his appearance at trial.

         5. Also on October 9, 2018, the court excluded the time between August 24, 2018 and December 5, 2018 from the 70-day calculation under the Speedy Trial Act. The court determined that this matter is complex within the meaning of 18 U.S.C. § 3161(h)(7)(B)(ii). The court set a trial date of February 11, 2019 for Jacob, Isaiah, and Lev.

         6. On November 20, 2018, the Government filed its first superseding indictment, which added new counts against Jacob and Isaiah.

         7. In early December 2018, the parties disagreed about whether the February 11, 2019 trial should be continued. In a brief filed on December 7, 2018, the Government argued that the trial should be continued. Because Jacob's counsel had a conflicting trial scheduled in the Eastern District of New York, he also requested a continuance of the trial date. Isaiah and Lev, however, filed briefs opposing any continuance of the February 11, 2019 trial date because of their detention status.

         8. On December 21, 2018, the court continued the trial until May 13, 2019. The court excluded the time between December 5, 2018 and May 13, 2019 from the 70-day calculation under the Speedy Trial Act. The court excluded the time as to Jacob under 18 U.S.C. § 3161(h)(7). After weighing the three Vo g l factors mandated by the Tenth Circuit, the court also excluded the time as to Isaiah and Lev under § 3161(h)(6). Additionally, the court analyzed whether the defendants should be released from pretrial detention under the 90-day rule found in 18 U.S.C. § 3164. The court determined that, at minimum, the time between August 24, 2018 and December 5, 2018 should be excluded from the 90-day calculation because, until that date, no party had “zealously pursued a speedy trial.” Because 90 non-excluded days had not elapsed, the court ruled that the automatic review provision of § 3164(c) had not yet been triggered.

         9. On January 15, 2019, counsel for Jacob notified the court that his trial in the Eastern District of New York had been continued and that he could not attend the trial scheduled to begin on May 13, 2019. Despite his counsel's lack of availability, Jacob did not move to continue the trial date.

         10. On January 22, 2019, the Government unsealed the second superseding indictment. This indictment added new counts against Jacob, Isaiah, and Lev. It also added two new defendants: Rachel and Sally. The Government did not seek pretrial detention for Rachel and Sally. The Government instead sought $10 million bonds for these defendants. The magistrate judge denied the Government's request that Rachel and Sally be required to post bonds and they were released on conditions.

         11. On February 14, 2019, Rachel and Sally filed a joint motion to continue the May 13, 2019 trial date until July 25, 2019. They argued that because they were new to the case, their counsel could not be ready for trial by May 13. Jacob stipulated to the motion to continue. Isaiah and Lev objected to the motion to continue.

         12. On February 19, the court held a status conference regarding the trial date. The court ordered the Government and the detained parties to brief § 3164 as it relates to their pretrial detention. The parties filed their briefs by February 24, 2019.

         13. At a detention hearing held on March 4, 2019, Lev's counsel revealed that he had accepted a new criminal client who has a six-week trial scheduled to begin April 29, 2019 in the Eastern District of New York City. Thus, despite Lev 's earlier objection to a continuance of the currently scheduled May 13, 2019 trial date, his counsel is no longer able to appear at a trial held on this date.

         14. This matter involves novel questions of law regarding renewable fuel tax credits including the biodiesel mixture credit, the renewable diesel mixture credit, the alternative fuel credit, and the alternative fuel mixture credit.

         15. The Second Superseding Indictment charges a total of 46 counts against five defendants. These counts allege an intricate scheme involving the international transportation of fuel and the transfer of funds among a number of domestic and foreign entities.

         16. Discovery in this case is voluminous, consisting of approximately 500 GB and approximately 850, 000 items. Additionally, the government has made 116 banker's boxes of seized hard copy material and a number of electronic devices available for defense counsel's review. The government has also produced 1.3 TB of pole cam footage. Finally, approximately 145 GB of unfiltered search warrant material has been provided to the defendants for review.

         17. Rachel and Sally's counsel received an external hard drive from the Government containing the initial discovery on February 12, 2019. They represent that they need more time to review this discovery.

         18. Jacob's counsel is scheduled to begin a trial in the Eastern District of New York on April 29, 2019. Jacob's counsel represented that he will not be available for trial in this matter until the third week of June.

         B. Jacob, ...


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