Gas Marketer B. Charles Rogers Gas and Three Individuals Agree to Pay $4.375 Million to Resolve Royalty Fraud Allegations
Gas marketer B. Charles Rogers Gas Ltd. (BCR), which operated in the San Juan Basin area of New Mexico and southern Colorado, and its owners Billy Charles Rogers Jr. and Wynon Rogers, of Fort Worth, Texas, have agreed to pay $3.575 million to resolve False Claims Act (FCA) allegations that they caused reduced mineral royalty payments to the United States, the Department of Justice announced today. In addition, Thomas R. Lutner III, of Katy, Texas, who worked with BCR while employed as a gas supply manager at a natural gas distributor based in Houston, Texas, has agreed to pay $800,000 to resolve FCA allegations relating to his role in BCR’s alleged royalty fraud.
“The Department of Justice is committed to ensuring that those who remove valuable assets from public or Indian lands pay a fair price for those assets,” said Assistant Attorney General Jody Hunt, of the Department of Justice’s Civil Division. “We will continue to pursue claims against those who evade, or cause others to evade, their royalty obligations.”
“Businesses that underpay for our nation’s natural resources must be held to account,” said U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
The United States alleged that, while operating as a gas marketer in the San Juan Basin, BCR, at the direction of Mr. and Mrs. Rogers and Mr. Lutner, issued to producers false transaction statements in connection with BCR’s gas purchases. Those transaction statements allegedly underreported the volume and value of the natural gas liquids that BCR purchased. The United States alleged that many of the producers had federal gas leases, and that BCR’s fraudulent conduct caused those producers to underpay royalties owed to the United States on gas removed from those leases. BCR, Mr. and Mrs. Rogers, and Mr. Lutner have admitted and accepted responsibility for making and using, or causing to be made and used, false records that were material to producers’ obligations to pay royalties to the United States.
“The Department of the Interior (DOI) Office of the Inspector General (OIG) is committed to working with the Department of Justice and the Office of Natural Resources Revenue to ensure that public oil and gas revenues are properly accounted for and collected on behalf of the American public and all mineral interest owners,” said Ron Gonzales, Special Agent in Charge of the DOI OIG Energy Investigations Unit.
The civil settlement was the result of a coordinated effort by the Justice Department’s Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Northern District of Texas; and the DOI OIG.
Except to the extent of the facts admitted by the settling parties, the claims resolved by the settlement agreement are allegations only and there has been no determination of liability.