Chesapeake faces additional charges in Michigan

Prosecutors in Michigan have filed another 12 counts of fraud against Chesapeake Energy Corp. for allegedly obtaining lease options by false pretenses.
by Jay F. Marks Published: June 25, 2014

Michigan prosecutors Wednesday filed additional fraud charges against Chesapeake Energy Corp.

The Oklahoma City-based oil and natural gas producer is accused of failing to honor oil and natural gas leases it signed with 20 Michigan property owners in 2010.

Prosecutors contend Chesapeake and its agents used a scheme known as “cold drafting” to obtain lease options by false pretenses, preventing competitors from leasing land while not compensating the property owners.

Michigan Attorney General Bill Schuette charged Chesapeake earlier this month with one count of conducting criminal enterprises and eight counts of false pretenses. Prosecutors added another dozen fraud counts Wednesday, identifying 12 more alleged victims.

The charges are punishable by thousands of dollars in fines, but Chesapeake spokesman Gordon Pennoyer contends they have no merit.

“We will vigorously contest these baseless allegations,” Pennoyer said.

Chesapeake representatives appeared in court Wednesday to face the charges in Cheboygan District Court.

A preliminary exam was set for Aug. 18.

Chesapeake also is facing antitrust charges in a separate case for allegedly conspiring with another natural gas producer, Encana Corp., to limit prices in a 2010 land auction.

Encana settled with prosecutors in May, but Chesapeake maintains it did nothing wrong.

Chesapeake has asked a judge to dismiss the antitrust charges, but the judge has not ruled on whether there is sufficient evidence for a trial in the case.

>>Read: Chesapeake facing new charges in Michigan (Published June 5, 2014)

>>Read: Criminal charges filed against Chesapeake Energy in Michigan over alleged lease auction scheme (Published March 5, 2014)


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by Jay F. Marks
Energy Reporter
Jay F. Marks has been covering Oklahoma news since graduating from Oklahoma State University in 1996. He worked in Sulphur and Enid before joining The Oklahoman in 2005. Marks has been covering the energy industry since 2009.
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