United States v. Kingston, 2:18-cr-00365

Background

Lev Dermen was convicted after a seven‑week jury trial of ten counts for conspiring to defraud the U.S. of renewable fuel tax credits and related money‑laundering offenses; several Kingston family co‑defendants pleaded guilty and cooperated.
The Government presented 14 witnesses and hundreds of exhibits (emails, texts, bank records) tracing fraud proceeds through entities (Noil, SBK‑USA) and foreign transfers (Turkey, Luxembourg) to Dermen or his associates.
Lead Government witness Jacob Kingston described multiple rotation/recertification schemes (India, Panama, Westway, Morrissey, Viscon) and payments to Dermen (broker fees, loan repayments, Bugatti, real‑estate purchases); testimony was corroborated by Isaiah Kingston, Zubair Kazi, and IRS Special Agent Washburn’s fund tracing.
After verdict, several new items surfaced: Kazi’s civil lawsuit against a purported intermediary, an unsealed plea and related FBI complaint implicating Edgar Sargsyan and an FBI agent, a Mega Varlik valuation report, and a DOT‑OIG investigation of pilot Nicolas Steele.
Dermen moved under Fed. R. Crim. P. 29 (judgment of acquittal) and 33 (new trial) asserting insufficiency of evidence, newly discovered evidence, and Brady/discovery violations; the court denied relief but ordered disclosure of specified ex parte Government filings.

Issues

Issue	Plaintiff's Argument (Government)	Defendant's Argument (Dermen)	Held
Sufficiency of the evidence (Rule 29)	Government: documentary and testimonial proof (texts, emails, bank traces, witness testimony) established each element of the ten counts.	Dermen: evidence was insufficient to prove knowledge, participation, or interdependence on any count.	Denied. Court: viewing evidence in Government’s favor, a rational juror could convict on all counts.
Weight of the evidence (Rule 33 — "against the weight")	Government: witnesses and corroborating records overwhelmingly support verdict.	Dermen: verdict was against the weight; credibility problems and alternative explanations justify new trial.	Denied. Court: after weighing credibility, evidence strongly supports convictions.
Newly discovered evidence (Rule 33 — Stevens factors)	Government: post‑verdict materials are largely impeachment or irrelevant and would not likely produce acquittal.	Dermen: Kazi suit, Sargsyan plea/complaint, Mega Varlik report, and Steele materials would impeach witnesses and undermine verdict.	Denied. Court: Stevens test not satisfied — proffered items are mostly impeachment/irrelevant or would not probably lead to acquittal.
Brady / discovery obligations (Kazi phone, LA BEST materials, rough notes, Steele investigation)	Government: no suppression; many items were not in prosecution team’s possession or were not material; LA BEST not part of prosecution team.	Dermen: Government had constructive control/knowledge and suppressed impeachment material that was material to credibility.	Denied. Court: no Brady violation — no constructive control over third‑party phone, LA BEST not prosecution team, and nondisclosed material not shown to be outcome‑determinative.
Ex parte filings / reopening discovery	Government previously filed ex parte materials re: Sargsyan; argued limited relevance.	Dermen: sought disclosure of ex parte filings and broader reopening of discovery.	Partly granted: court ordered disclosure (unsealing) of specified ex parte docketed submissions; all other requests to reopen discovery denied.

Key Cases Cited

United States v. Vallo, 238 F.3d 1242 (10th Cir. 2001) (standard for reviewing sufficiency of the evidence under Rule 29)
United States v. Stevens, 978 F.2d 565 (10th Cir. 1992) (five‑part test for newly discovered evidence under Rule 33)
Kyles v. Whitley, 514 U.S. 419 (1995) (prosecutor’s duty to learn and disclose favorable evidence)
Brady v. Maryland, 373 U.S. 83 (1963) (prosecution must disclose exculpatory evidence)
Giglio v. United States, 405 U.S. 150 (1972) (impeachment‑related disclosure and materiality)
United States v. Combs, 267 F.3d 1167 (10th Cir. 2001) (limits on Government’s obligation to obtain evidence from third parties)