Nov 1

Report underpaying oil royalties (oil royalty fraud) and get a government whistleblower reward

If you report an oil company that is cheating the government by underpaying oil royalties, you may be entitled to a large whistleblower reward, as shown in this article. In fact, the Department of Justice is seeking whistleblowers to report oil royalty fraud and is offering huge rewards.

Government Rewards for Reporting Oil Royalty Fraud

The U.S. Government owns large tracks of land and water rights, including many miles out to sea from the U.S. boarders. These federal lands and off shore oceans contain valuable oil and gas. Generally the government sells the right to extract oil or gas from federal lands in the form of “royalty contracts.” In short, the oil company is entitled to remove oil or gas from government land or sea in exchange for a promise to pay the government a royalty when it is sold. Assuming that the royalty rate for onshore production of oil is 1/8, the oil company would pay the government 1/8 of the price it received from an arm’s length transaction of oil sold.

In late 2016, Mr. Hesch attended a meeting with government attorneys in charge of the Fraud Section and who are responsible for prosecuting oil royalty fraud. At that meeting the Department of Justice attorneys announced that DOJ is very interested in whistleblowers stepping forward to report oil companies underpaying royalties owed. Yes, the government is asking for the help from whistleblowers who know of fraud schemes to short the government out of oil royalties, and it is prepared to pay rewards of up to 25% of the amount it recovers back from the oil company.

Examples of Underpaying Oil Royalty

Fraudulent schemes abound in this area of federal contracting to cheat the government out of its oil or gas royalties. Forms of oil royalty fraud include:

• concealing the true volume of oil removed from federal land or seas
• lying about the price the oil company received when selling the oil removed from federal lands
• creating a subsidiary company to buy the oil at below fair market price

Find out if you are eligible for a reward. In a case Mr. Hesch had worked on while he was an attorney in the Fraud Section of the Department of Justice in Washington, D.C., the government recovered $430 million from 16 major oil companies for underpaying oil royalties and over $1 million dollars was paid out in whistleblower rewards. These same oil companies have also been forced to repay hundreds of millions of dollars for underpaying royalties for natural gas.

Report Underpaid Oil Royalties (royalty fraud) Now

If you know if an oil or gas underpayment of royalty fraud scheme against the government and are interested in a reward, fill out our fraud questionnaire by clicking on this link or the link at the bottom of the page that says “Fraud Questionnaire”. By doing so, you can have Mr. Hesch review your case in confidence to find out if you have the right type of case of fraud against the government in which a monetary reward is available for reporting oil or gas royalty fraud against the government.

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