(The Center Square) – A federal grand jury returned an indictment against Teresa McCown this week.
The jury charged her with violating the Federal Oil and Gas Royalty Management Act and wire fraud, according to the U.S. Attorney for the District of New Mexico’s office.
The 55-year-old from Farmington has been released pending trial. The trial has not yet been scheduled.
From January 2017 to June 2023, McCown owned M&M Production & Operation, Inc. (M&M) and Shoreline Oil & Gas Company (Shoreline).
Both companies extract oil and gas from land leased to the companies by the federal government, the Navajo Nation, and the Jicarilla Apache Nation. Both companies also sold extracted oil and gas to refiners.
M&M and Shoreline had to report both the quantity and quality of oil and gas extracted from the leases and how much revenue they got selling them to the Department of the Interior, Office of Natural Resources Revenue (ONRR), in the Report of Sales and Royalty Remittance (Form ONRR-2014) forms and Oil and Gas Operations Reports (OGORs).
The reports help determine the royalties for the entities leasing the land.
However, a review of financial statements from these refiners by ONRR found that both companies’ reports were wrong.
“More specifically, a detailed analysis revealed over 400 incorrect reports on both Indian and Federal leases between January 2017 and July 2021,” a release said.
ONRR issued a Notice of Noncompliance to McCown in March 2021 because M&M failed to report its oil and gas production from July 2019 through January 2021.
ONN also authorized the issuance of civil penalties due to the Notice of Noncompliance because the company failed to correct its errors.
“After receiving notices, penalties, and participating in teleconferences with regulators, McCown failed to correct false and inaccurate reporting,” the release said. “The total civil penalties assessed by ONRR for multiple violations by M&M and Shoreline total $1,707,339.58.”
McCown faces eight counts of wire fraud for knowingly submitting false and inaccurate reports.
“Specifically, McCown submitted the false and inaccurate reports over the internet via ONRR’s website,” the release said. “The electronically submitted forms were transmitted over interstate wire from Farmington, New Mexico to servers in Raleigh, North Carolina. ONRR employees in Lakewood, Colorado then accessed the same data through an internal networking system for overseeing production reporting and to process royalty payments.”
McCown could get up to 20 years in prison and $300,000 in additional fines if convicted.
Her release conditions bar her from working as a record-keeper or reporter in any industry subject to state or federal reporting or regulatory requirements; this includes oil and gas companies.
The Department of the Interior, Office of Inspector General, Office of Investigations, Energy Investigations Unit investigated the case, and Assistant U.S. Attorney Alexander Flores is prosecuting it.
