CIA Director R. James Woolsey, whose name came up repeatedly last week in a Utah federal courtroom during a series of sentencing hearings connected to a byzantine $511 million scheme run by members of a polygamist Mormon group tied to the Armenian underworld, may have found himself in handcuffs on money laundering charges if “he wasn’t suffering from dementia,” sources tell LA Mag.
Using the codename “Grandpa,” Woolsey was connected to the fundamentalist Utah-based Mormon sect via polygamist engineer Jacob Kingston, who was sentenced last week to 18 years in federal prison for his role in orchestrating the scheme.
Kingston, 38, testified that he laundered roughly $140 million stolen from the U.S. Treasury in Turkey with the help of a reputed CIA asset — Turkish biopharma billionaire Sezgin Baran Korkmaz. Kingston met Korkmaz via his former partner in the scam, L.A. gas station titan Levon Termendzhyan, aka Lev Dermen, a man prosecutors call the boss of the Armenian Mafia and who is better known in underworld circles by his nickname: the Lion.
The Mormon and the mobster, prosecutors say, used Korkmaz to help them purchase the Mardan Palace luxury hotel in Turkey, the airliner Borajet, a waterfront villa in Istanbul, and a superyacht christened the Queen Anne. The overseas spending spree was all paid for by unearned subsidies paid out in a complex international scheme run out of Kingston’s Washakie Renewable Energy, located on a north Utah cattle ranch owned by the Order. The sect, which has been called a racist “blood cult” by the Southern Poverty Law Center, used it to apply for lucrative green energy tax credits.
But Kingston believed other monies he was sending to Korkmaz in Turkey “was being used to fund CIA operations with Kurdish groups,” his lawyer, Marc Agnifilo, told U.S. District Court Justice Jill Parrish last week during his client’s sentencing hearing.
“There is so much complexity,” Agnifilo told the judge about Kingston’s international and domestic ties to Woolsey. The attorney also detailed how Jacob believed he was paying for an “umbrella” of protection from a cabal of crooked cops and dirty federal agents, three of whom have now been convicted of selling their badges and top-secret security clearance to Armenian underworld figures.
“The crime is so massive, just so epic…hundreds of millions are going to Turkey,” Agnifilo said, adding: “Jacob believed that some of it, not all, was sanctioned by the U.S. government and the CIA, money is going to business entities in Turkey to fund the CIA. There is so much backstory.”
And that backstory directly involves Woolsey, the CIA, Agency assets, and transnational crime figures, something the judge called “a million different rabbit trails,” involving, she added, “all kinds of unsavory characters.”
Kingston testified that in 2018, as the feds were closing in on the scam he was running alongside one of his three wives, Sally, his brother Isaiah Kingston, and their mother Rachel Kingston, he wired Korkmaz $6 million to pay for what he believed was Woolsey’s connections after receiving a series of texts promising that he would be protected from prosecution by a friendly judge.
“The judge is a good guy. He will not disappoint the grandpa,” Korkmaz wrote on June 12, 2018. Two days later, Korkmaz began pestering him for money. “the grandfather called now. It has to be done in 5 days. last chance.” Another read: “grandpa big problem $,” along with a siren emoji.
“Jacob was desperate,” Agnifilo explained to the judge. “He sold his Lamborghini, a Ferrari, his wife’s jewelry,” in order “to pay Baran Korkmaz,” and get Grandpa’s help. The cars, and the jewelry, were paid for by stolen taxpayer dollars, prosecutors said.
And Jacob Kingston believed it when Korkmaz said the CIA was protecting him. He had been bragging that he had connections “all the way to the top,” who could “walk right up to somebody and prick them with a poison ring and it would kill them,” as Isaiah would testify.
Kingston and Dermen were frequent guests of Korkmaz in Turkey, traveling there at least nine times where they took meetings with Turkish President Recep Erdogan, and, prosecutors said, set themselves up for a planned luxurious life on the run. During those trips Korkmaz introduced them to a longtime CIA official who had been stationed in Turkey, Graham Fuller.
“There were hundreds of millions stashed in Turkey,” Assistant U.S. Attorney Rich Rowling told the judge last week. Jacob and the Lion, Rowling added, “had been jet-setting around the world,” often with Korkmaz, who invited them to attend diplomatic events as part of the billionaire’s board work. At one such event in 2015, Korkmaz made a public pledge to give $20 million to a United Nations-connected charity, Relief International, to help displaced Syrians. That earned him a formal dinner at New York City’s Harvard Club organized by a shadowy Beltway official named Daniel Patrick Puls, one filled with State Department bigwigs and UN diplomats.
Organizers of the event were stunned to learn that Korkmaz’s invited guests were Jacob and the Lion: a Mormon polygamist whose father had famously been convicted of beating one of Jacob’s 127 siblings nearly to death on the same ranch where Washakie sat, and an LA crime boss with a criminal record tied to Armenian organized crime, an energy titan so well connected his name appears in the Panama Papers. “When Mr. Korkmaz arrived with his guests, we had to shift around all the tables,” Puls’ testified in Dermen’s trial. “We generally try to do a lot of due diligence on everyone that attends. Security is an issue and so forth. So there were issues.”
And after all that drama, and Korkmaz’s reneged promise, there were no apparently no hard feelings. Months later, Puls was working with Ambassador Natalia Gherman of Moldova, to help her candidacy for UN Secretary General and organized a meeting between the diplomat, Korkmaz and the Lion at Peninsula Hotel. The Turk and the Armenian showed up 30 minutes late, Puls testified.
By then fraudsters had befriended President Erdogan, who sent police escorts to ferry the Kingstons and Dermen from the airport. In August 2018, Jacob brought his wife Sally and some of their children to Turkey to christen the Queen Anne yacht — also paid for by taxpayer dollars — with Dermen and Korkmaz. Jacob was even taking Turkish language lessons with a tutor, part of his plan, prosecutors say, to flee to Istanbul.
Weeks after the $6 million yacht’s inaugural voyage, Jacob Kingston bought one-way tickets to Turkey for his wife Sally and three of their sons. When they arrived at the airport — in disguise and split up in separate TSA lines — IRS agents were waiting to pounce. Jacob and Sally were arrested on a slew of federal money laundering and fraud charges before they could board their flight at the Salt Lake City airport. Isaiah and Rachel Kingston were picked up on the Order compound where the sect operates dozens of lucrative businesses, including its own bank and Desert Tech, a military grade weapons manufacturing company.
That same day, Dermen was arrested at a federal building in downtown L.A. after he returned from Turkey to meet with IRS agents about his former protege, Edgar Sargsyan, a phony lawyer, who the Lion caught stealing $20 million and a private jet from him. By then, Sargsyan had already flipped on his boss after telling colleagues, “I’m a dead man.”
Korkmaz remained a free man, temporarily. As his friends and coconspirators were held in a Utah county jail, Korkmaz invited “grandpa,” James Woolsey, and Donald Trump fundraiser Tommy Hicks Jr. to fly to Turkey, for free, on a sleek black private Borajet plane — again, funded by U.S. taxpayers with proceeds from the massive biofuel fraud, its purchase listed among the criminal counts in the federal indictment against Dermen and the Kingstons that had just been unsealed.
The trip was set up by Woolsey’s wife, lobbyist Nancye Miller, who is now deceased and was referenced in court records as “Grandma,” billed as a chance to negotiate with Turkish authorities for the release of Andrew Brunson, a North Carolina pastor working in Izmir. The pastor had detained since his arrest on espionage and terrorism charges in the aftermath of a failed 2016 coup; which Turkish authorities blamed on the CIA, going as far as to accuse CIA official Graham Fuller and Brunson of working with the Kurdistan Workers’ Party (PKK), an armed group which is labeled a terrorist organization that has been fighting for autonomy in Turkey, to plan it. Brunson was released shortly after Korkmaz pressed his friend, President Erdogan, to reconsider his imprisonment.
Korkmaz had a powerful negotiating tool: Desert Tech weapons. According to court testimony in Dermen’s trial, Korkmaz made a deal “between Desert Tech and the CIA to sell guns in the Middle East,” information shared with federal investigators after the four Kingston defendants pleaded guilty and began cooperating with investigators in July 2019. The family began spilling the beans on Korkmaz – and offered up the Lion.
Their proffers led international authorities to raid six Turkish businesses owned by Korkmaz in December 2020. At that point, Korkmaz went on the run and remained a fugitive when a grand jury in the District of Utah returned an indictment against him on 12 counts of money laundering conspiracy, wire fraud, and obstruction of an official proceeding months later.
Korkmaz was captured in June 2021 after Interpol tracked him to a luxury hotel in Austria and dragged him off a massage table at its high-end spa in cuffs. He was extradited to Utah in 2022 and is now awaiting his October trial in a Salt Lake City lockup.
Many of the recent filings in his case are under seal, so it remains unclear what he is telling investigators about his relationship to Woolsey, as well as with the veteran intel officer and Rand policy maker Fuller, who was called as a witness in Dermen’s trial and asked about funding Kurdish operations. [He wasn’t talking.]
Korkmaz was also asked about his relationship with Puls, who was not only the head of the charity bilked out of a $20 million donation, he also worked as a consultant for the Kurdish Regional Government, describing his role as helping with “emergency response and with humanitarian affairs,” for the Peshmerga, the US allies fighting on the front lines of the Syrian conflict.
Puls was Korkmaz’s plus-one at from Dermen’s 50th birthday soiree in L.A., a Hollywood style spectacle at the Universal Studios Hilton packed with A-listers who honored the titan just weeks before the federal takedown and during the same week the Queen Anne yacht set sail on the Bosphorus.
The birthday bash was “beautifully orchestrated,” Puls remembered on the stand, a “very, very large scale event in a sound studio, kind of like where you make a movie.”
A movie where the Lion got top billing. Armed bodyguards roamed the property. A boom camera hovered over the crowd projecting the festivities on concert-sized screens. Lavishly decorated banquet tables were piled high with food. Outside live Lions guarded luxury cars wrapped in massive bows. Live. Roaring. Lions. In the middle of the festivities, Korkmaz took to the mic flanked by scantily clad women. On the big screens a special guest appeared from Italy, “one of the Bugatti founders,” Puls remembered, as Korkmaz gifted one of the seven-figure cars to his friend the Lion.
The shindig would be the Lion’s swan song. Last week, Parrish sentenced him to 40 years in federal prison, citing the unfathomable amounts of cash — “almost like Monopoly money,” she said from the bench — that the co-conspirators were able to steal from the government.
‘It’s easy to say it’s just a faceless victim,” Parrish said. “The victim is every single individual in the country who is a tax-paying citizen.”
Dermen, 58, addressed the judge and repeatedly declared his innocence saying that he was an honest businessman who was pulled into a labyrinthine plot by the Kingstons, set up to take the fall for the long-running scam in a state friendly to Mormons, where polygamy has been decriminalized. He declared animatedly in an orange prison jumpsuit while handcuffed and shackled that he plans to appeal his case to the highest courts. “There is always law out there that will bring out the truth.”
Dermen’s lawyer Mark Geragos [who is the co-owner of Engine Vision Media, the parent company of Los Angeles Magazine] had elicited testimony from numerous government witnesses that he argued supported the CIA operation during his client’s forfeiture hearings. His stated theory was that the Washakie biofuel rip-off was an elaborate CIA operation to sidestep Congress and supply the Kurds in Syria, no different than the Iran-Contra scandal when the Agency under the Reagan Administration was accused of secretly paying for covert operations by facilitating narco-traffickers. “If you don’t think this was a CIA operation, then you’ll believe that Jacob Kingston doesn’t know how many brothers and sisters he has,” Geragos said.
Parrish also delivered harsh sentences to the other con artists in the Kingston clan, who grew up in a religion that thrives on stealing from the government, which the Order coins, “bleeding the beast.” Rachel, 67, who prosecutors called “the queen of fraud,” was sentenced to 8 years; Sally, Jacob’s first wife, 6; and Isaiah, who made $11 an hour throughout the scam, was hit with 12 years.
And more arrests are coming, prosecutors said during the sentencing hearings, targeting the “numbered men,” or the leaders of the Order, Jacob and Isaiah’s father John Daniel Kingston and their uncle, the Order’s “prophet” Paul Kingston. Jacob has agreed to cooperate with that investigation, and even take the stand against the men, a stunning move that could decimate the decades-old polygamist group and its business empire.
Jacob’s third wife Hannah Tucker, who met the Lion while traveling to Turkey with her spiritual husband, was making plans to run away with the purported mafia kingpin during visits to his jail cell after their arrests. But in the Salt Lake City courtroom last week, she showed up to support her husband and didn’t stay for Dermen’s sentencing.
Meanwhile, the government is trying to recoup its losses. The Queen Anne was seized in Beirut, where Korkmaz had tried to hide it, and was sold by U.S. Marshals for an undisclosed amount. The cash squirreled away in Turkey is long gone, as are the luxury cars, waterfront mansions, and private jets.
Woolsey could not be reached for comment, but a former CIA official confirmed that his mental health is deteriorating. If he had been charged, he would have been the third federal agent to go down in the case.
A high-ranking FBI agent with top-secret security clearance, Babak Broumand, was convicted last year of selling his badge to the Armenian Mafia in connection with this biofuel scam; as was Homeland Security Investigations Agent Felix Cisneros, who helped a known Mexican cartel leader cross the border in order to work at Washakie. Glendale narcotics detective John Balian also pleaded guilty to working for the Armenian and Mexican Mafias while on duty.
Sargysan, the fake lawyer who counted California Governor Gavin Newsom and embattled L.A. City Councilor Kevin de Leon as friends, took the stand against the coterie of crooked cops he maintained on the Armenian underworld’s payroll, who were called “the Boys.” He has yet to be charged with paying a ringer to take the State Bar exam in his name with a fake id, and the lawyer who pulled it off, Henrik Mosesi, is still practicing law even after Sargysan testified he paid his pal $10,000 a month to study for the Bar and gave him a Rolex when he passed it in Sacramento.