Only in Texas? Man Sentenced to Prison for Mineral Rights Fraud

A Spring, Texas man employed by a subsidiary of oil giant ExxonMobil has been sentenced to more than five years in prison and ordered to pay $1 million in restitution for mineral rights fraud.

Steven Fisackerly, 33, was employed as a landman by ExxonMobil subsidiary XTO Energy in Fort Worth. Prosecutors charged Fisackerly with mail fraud, saying that from 2009 to 2011, he used his access to company information and his knowledge of XTO’s lease process to generate fake gas leases and pocketed the profits from those bogus leases.

According to the complaint, Fisackerly was responsible for approximately nine fraudulent transactions totaling just over $1 million. In addition to the false gas leases, Fisackerly was also charged with altering information to generate fake documentation.

Fisackerly worked as a landman for XTO Energy form 2008 to 2012. Prosecutors said that his duties included the negotiation of oil and gas leases with landowners, which gave him access to the company’s computer system to track leases as well as the cost of bonus payments for those leases.

Prosecutors said that in one of the transactions, Fisackerly changed the name on a lease document from the rightful owner to the initials, “E.C.” Fisackerly also admitted that he created a sham company to obtain mineral rights for XTO Energy and then used that company to generate false bonus checks that he then cashed himself.

XTO Energy officials cooperated in the investigation, saying that “XTO does not tolerate fraud or any other criminal behavior.”

Mineral rights fraud covers a broad category of fraudulent activity related to oil and gas drilling activities, including illegitimate titles, illegally frozen leases, horizontal drilling without permission, sampling malfeasance and financial fraud.

Earlier this year, a group of Western Pennsylvania natural gas royalty owners filed a class action suit against XTO for improperly deducting postproduction expenses from their royalty checks. The complaint alleges that XTO disregarded the language in the original leases it acquired from Phillips Petroleum and deducted various postproduction expenses from the owners’ royalties. The plaintiffs allege that XTO breached the oil and gas leases when it began to deduct postproduction expenses when calculating and paying the royalties.

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