Royalties

Failure to pay mining royalties

A multinational mining corporation agreed to pay $42.2 million to settle allegations that it unlawfully sold more than two million cubic yards of sand that it mined without paying royalties to the State.  The mining company had entered into leases with the State Lands Commission to dredge sand and gravel in exchange for royalty payments.  According to allegations, the company knowingly dredged sand that was outside of its lease boundaries, and then sold the sand to concrete companies for large profits.  The company also allegedly underreported the amount of sand it sold and the amount of royalties owed to the State.

Underpayment of natural gas royalties

A number of major oil companies agreed to pay the government $97.5 million to resolve allegations that they underpaid royalties to the Department of the Interior’s Minerals Management Service.  The False Claims Act case was brought by two auditors with the Mineral Management Service who alleged that the oil companies had undervalued and underreported the value of the natural gas produced on land obtained from federal and Indian leases and underpaid royalties owed to the government.  The defendant companies submitted false certifications that the interest payments on royalties owed on crude oil, natural gas, and hydrocarbon production complied with federal law and regulations.