Chevron Will Pay Over $45 Million For Underpaying Royalties
January 27, 2010 by nick
On December 23, 2009, the Department of Justice reported the settlement of a False Claims Act case involving Chevron Corporation, Texaco, Unocal Incorporated and their affiliates (the Chevron companies), for violating the False Claims Act by knowingly underpaying royalties owed on natural gas produced from federal and Indian leases. The companies have agreed to pay the United States $45,569,584.74 to resolve the allegations.
The case was initiated by whistleblower Harrold Wright under the whistleblower provisions of the False Claims Act, which allow private citizens to file actions on behalf of the United States and share in any recovery. Because Mr. Wright is deceased, his heirs will receive $12,303,787.88, plus interest, as part of this settlement.
Each month, companies are required to report to the Minerals Management Service the value of the natural gas produced from their federal and Indian leases and pay a percentage of the reported value as royalties. This settlement resolves claims by the United States that the Chevron, Texaco and Unocal companies systematically under reported the value of natural gas they took from federal and Indian leases from March 1988 to November 2008 and so paid less in royalties then they owed.
Specifically, the companies were alleged to have 1) improperly deducted the cost of boosting gas up to pipeline pressures, 2) used affiliate transactions to fraudulently reduce the reported value of gas taken from federal and Indian leases, and 3) improperly reported processed gas as unprocessed gas to reduce royalty payments.
“This settlement successfully ends long-standing litigation and ensures that taxpayers receive their fair share of royalty revenues from energy production on federal and American Indian lands,” said Interior Secretary Ken Salazar. “Most of the $45 million settlement will be disbursed to appropriate federal, state and American Indian accounts that were affected by Chevron companies’ underpayment of natural gas royalties and improper deductions.”
The suit brought by Mr. Wright alleges that a number of companies systematically underpaid royalties due for their production of natural gas from federal and Indian lands. The Justice Department previously settled with Burlington Resources Inc. for $105.3 million, Shell Oil Company for $56 million and Dominion Exploration and Production Company for $2 million.
If you are seeing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.
Bobby L. Maxwell – Fighting the Good Fight
December 3, 2006 by bob
Bobby L. Maxwell – another modern day hero trying to make the world a better place.
Over the course of his distinguished career as an auditor for the Interior Department, he recovered hundreds of millions of dollars from oil companies that were routinely and consistently underreporting royalty payments to the federal government. He was so successful at making the oil companies toe the line that he was eventually promoted to a position where he was supervising 120 people.
You’d think that someone who had been praised by the Secretary of the Interior as recently as 2003 for their outstanding job performance and leadership skills would have at least a little job security, but Bobby Maxwell recently found out that this isn’t always the case.
