Kay County Company and Individuals Pay $175,000 to Settle Claims of the United States
Oklahoma City, Oklahoma – Sanford C. Coats, United States Attorney for the Western District of Oklahoma, announces that CASE SALES COMPANY, INC., GARRY DAVIS, CAROL SAWYER, and THOMAS J. MORRIS, III, have agreed to pay $175,000 to settle claims related to a debt owed to the United States.
Case Sales Company, Inc. (“Case Sales”), is an Oklahoma corporation that held five Indian oil and gas leases for wells located in the Anadarko, Oklahoma area, and was required to comply with certain reporting requirements to the U.S. Department of Interior for each well it operated. The United States alleged that from 2004 through 2009, Case Sales failed to submit timely and accurate reports. As a result, the Department of Interior assessed a civil penalty against Case Sales.
In January 2012, Case Sales filed a Petition in Kay County seeking to dissolve the corporation.Thomas J. Morris, III, was appointed as a receiver for the company.While the dissolution proceeding was pending, Morris distributed proceeds from the assignment of Indian oil and gas leases to Garry Davis, owner and president of Case Sales.The United States alleged this was a fraudulent transfer under the Federal Debt Collections Procedures Act, and in violation of the Federal Priority Statute.The United States also alleged that during the dissolution proceeding Carol Sawyer, daughter of Garry Davis and Secretary/Treasurer of Case Sales, made payments to a third party creditor in violation of the Federal Priority Statute.
In order to resolve the allegations brought by the United States, Case Sales, Davis, Sawyer and Morris paid $175,000.
In reaching this settlement, Case Sales, Davis, Sawyer and Morris did not admit liability and the government did not make any concessions regarding the legitimacy of the claims. The agreement allows the parties to avoid the delay, expense, inconvenience, and uncertainty involved in litigating the case.
This case was investigated by the Department of Interior Office of Inspector General. The case was prosecuted by Assistant United States Attorney Ronald R. Gallegos.