Feds Snub Virus-Based Mistrial Bid In $511M Fuel Fraud Case

By Mike LaSusa
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Law360 (March 16, 2020, 5:35 PM EDT) -- Federal prosecutors pushed back Monday against a mistrial bid by a California businessman who was convicted of participating in a $511 million renewable-energy tax fraud scheme, saying the man's claims that it was wrong to bring jurors together during a global pandemic were overblown.

Lev Aslan Dermen told the court in a Sunday filing that asking jurors to be in close proximity to one another goes against the advice of health experts, who are recommending everyone engage in "social distancing."

But before the Utah federal judge could rule on that motion, a jury found him guilty of conspiracy to commit mail fraud, conspiracy to commit money laundering and expenditure money laundering, among other counts, the DOJ said in a statement Monday evening.

In the mistrial bid, Dermen — who was accused of participating in a scheme to obtain energy credits by submitting bogus records and paperwork and rotating products through the U.S. and at least one other country — said the panic around the virus could cloud jurors' judgment, especially because two jurors in the case had already been dismissed for health issues.

"Compelling jurors to deliberate in this environment would be akin to asking jurors to deliberate as the smoke emerges from the floorboards and a fire is slowly consuming the jury room, ignoring the danger that surrounds them," he said.

The government responded Monday to the mistrial bid with a filing calling Dermen's request "excessive and unwarranted," and saying all the jurors in the case were present and apparently healthy.

"Having carefully considered both federal and state guidelines, this court has determined that the closure of the courthouse is not necessary," prosecutors said.

Dermen's attorney, Mark Geragos of Geragos & Geragos, told Law360 on Monday there's been no unified response to the coronavirus pandemic from the federal court system.

"Everybody's treating this on an ad hoc basis," Geragos said. "It's kind of a patchwork quilt of approaches across the country, and at some point somebody's going to have to make an executive decision."

Numerous courts across the country are experiencing disruptions because of the novel coronavirus.

The U.S. Supreme Court on Monday put off oral arguments scheduled for the next two weeks. The court building closed to the public last week, but Monday's notice indicated that official business will continue, without extending filing deadlines.

The U.S. is represented by John Sullivan, Richard M. Rolwing, Leslie A. Goemaat and Arthur J. Ewenczyk of the U.S. Department of Justice's Tax Division.

Dermen is represented by Mark J. Geragos of Geragos & Geragos.

The case is U.S. v. Lev Aslan Dermen, case number 2:18-cr-00365, in the U.S. District Court for the District of Utah.

--Additional reporting by Yvonne Juris, Christopher Cole, Cara Salvatore and Jody Godoy. Editing by Amy Rowe.

Update: This article has been updated to include information about the government's response Monday to Dermen's dismissal motion and information about the jury's verdict.

For a reprint of this article, please contact reprints@law360.com.

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USA v. Kingston et al

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August 01, 2018

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