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The oil and gas industry – and the energy sector in general – is one of the most highly-regulated industries in America. It involves everything from property rights and pollution to securities and taxes. As such, the industry sees its fair share of fraud.

If you’re thinking of blowing the whistle, it’s important to understand what kind of fraud you’re looking at and what laws can be used to try and stop it – as well as when to talk to an attorney. Some types of fraud are more common than others.

Whistleblower laws and oil and gas fraud

Four laws enable whistleblowers to call attention to and try to halt fraud against the government in the energy sector. You do not need to understand which law applies. In essence, regardless of the type of fraud, location, company disposition, or timing, a whistleblower may be able to call out fraud in the oil and gas industry. If it feels wrong, it very well might be, so if you see something, act on it. Just contact us, and we’ll work through it with you.

False Claims Act – The origin of whistleblower actions in the United States, this act enables whistleblowers to report fraud in government programs or contracts or fraud that prevents the government from collecting money owed to it. Some examples include bid-rigging and skimming royalties.

Dodd-Frank Act – This act enables whistleblowers to report fraud involving securities and commodities, which are regulated. Under this act, anything from the simplest crude oil scams to more elaborate forms of oil and gas investment fraud could rise to a whistleblower’s attention.

IRS Whistleblower Law – The Tax Relief and Healthcare Act of 2006 contained provisions for whistleblowers to report tax fraud. Taxation in the oil and gas industry is highly complex, making it a target for fraud. Not paying the government its due can also violate the False Claims Act, often classified as “reverse False Claims” because the fraudster is keeping money from the government rather than obtaining it.

Foreign Corrupt Practices Act – Among many other things, this law enables whistleblowers to report bribery and corruption. It does not matter where a company or person calls home. What matters is that they defrauded the U.S. government, and if you are aware of this fraud, you can blow the whistle.

Can I just call the SEC whistleblower hotline?

You can, but how do you know it’s the best “first move?” A consultation with an energy industry whistleblower lawyer may give you additional insight into your situation and help prepare you for what’s to come. There may be a more suitable agency to whom to report or that may offer a better chance for investigation. The process of a whistleblower case is different. Call an attorney and get your bearings. We can handle the details for you.


What are some situations in the oil and gas industry that may produce false claims?

Because of the many laws that combine to regulate the energy industry, companies can overcharge or short-change the government in many ways. Some types of companies and activities may carry additional risk:

  • Energy companies that serve or manage resources on behalf of the government – Those who provide or manage energy or fuel for the government must be alert for fraud. Incorrect billing, accounting, or other mistakes could result in many instances of fraud which each carry a penalty. A fraudulent bill overcharging by just one cent could cost thousands in fines – for each instance of overbilling by one cent.
  • Renewable energy companies that receive grants or sell energy to the government – The government gives grants to companies who are developing new, clean, and renewable energy sources – and that’s how the money should be used. The government also purchases energy to subsidize these efforts, which could also involve fraud. For example, what if the “clean” energy the government is buying is not cleanly produced according to the contract specifications? That’s almost certainly fraud.
  • Companies that explore government land or water or who buy resources from the government – The federal government owns about 28% of the land in the U.S., which amounts to about 640 million acres. The government can lease land to energy companies, pay them to explore government lands and waters for resources, or sell resources to them. In all of these situations, there lurks the possibility of fraud.

Of course, giant corporations have their fingers in every part of the oil and gas industry, but there are numerous smaller companies in the field as well. And while intentional fraud is certainly a problem, unintentional fraud can do damage as well – and can also be the basis of a qui tam case.

What are some examples of whistleblowers fighting oil and gas fraud?

Oil companies are among the most powerful entities globally from a financial and influence standpoint. Whistleblowers in this industry are taking the fight for justice to those with incredibly deep pockets and robust legal defense measures.

Royalties Fraud

Drilling for oil in the United States often involves leasing land from the government or Native American tribes. These leases generally include a royalty provision where the companies must pay the government royalties for the oil produced from wells on these leased lands. In one case, a group of whistleblowers blew open an alleged nationwide conspiracy across several oil companies to underpay those royalties to the government.

Result: Between the companies, they settled with the government for nearly half a billion dollars, and the major contributing whistleblowers received around $15 million each.1,3


A whistleblower filed an action against two companies, stating that the companies rigged bidding for mineral rights obtained through the Bureau of Land Management. The companies allegedly agreed not to bid against each other to keep the costs down and share in the profits after the fact. The whistleblower in this case alleged that this was collusion to obtain land leases from the government without paying the fair value of the land.

Result: The companies agreed to pay fines for violations of the Sherman Act and the relator’s attorney’s fees, and the allegations were resolved.1,3

Dodging Tariffs

Importing and exporting goods is big business, and in the energy industry, there’s more coming and going than just crude oil. Equipment and materials cross the border constantly. One whistleblower alleged that a company intentionally misclassified imported materials to avoid tariffs.

Result: The company agreed to a hefty settlement with the government, and the whistleblower received approximately $3.7 million for their contribution.1,3


Whistleblower laws don’t just prevent and punish fraud. They also have protections for whistleblowers – because doing the right thing shouldn’t be punished. In 2016, an energy company agreed to settle a case with the government due to its alleged retaliation against an internal whistleblower and attempts to prevent employees from reporting fraud.

One employee was in charge of engineers who managed part of the company’s drilling program and was concerned with how the company was calculating its reserves. The company fired the employee and allegedly tried to enact agreements that would silence and prevent whistleblowers from coming forward.

Result: The company agreed to pay $1.4 million in penalties. The internal whistleblower did not bring the case to the government’s attention, however, and did not share in the proceeds.3

Leasing Fraud

In one of the infamous disasters in recent memory, the BP Deepwater Horizon platform tragedy got plastered on the front page and across the American consciousness. Many deaths resulted from improper or insufficient safety measures, and the company’s claims regarding safety helped it obtain the lease to the area in which it was drilling. These alleged misrepresentations are against the False Claims Act.

Result: In addition to the very human tragedy, BP had to pay $82.6 million to settle False Claims Act allegations.3 Had a whistleblower stepped forward early on, they may have partaken of an award – and prevented many deaths.

An energy industry whistleblower lawyer should be your first call

We’ve seen many examples of good people trying to do the right thing and getting the short end of the stick. They call their company’s attention to a problem or report it to an internal fraud hotline. Then, they get ignored, demoted, transferred, disciplined, or even fired.

Even calling a government whistleblower hotline may not be the best move. Do you call the Department of Justice line? The Securities and Exchange Commission line? Just contact our experienced team of whistleblower attorneys online or at 1-888-292-8852.

Completely confidential, zero obligation, zero out-of-pocket expenses, guaranteed2

We know the risks that many whistleblowers are taking. Our You-First Policy tries to ensure that your best interests are served. Your call is just between us, and there’s no obligation to hire us. If you choose to retain a Carolina Whistleblower Attorney, it won’t cost you anything out of pocket, guaranteed.2 We are only paid a fee if we get you an award.

Awards we’ve won

For standards of inclusion for awards listed, visit,,,, and National Trial Lawyers Top 100 designation is for 2022. Regarding the Million Dollar Advocates Forum, we do not represent that similar results will be achieved in your case. Each case is different and must be evaluated separately. Firm award is for the Law Offices of James Scott Farrin. Attorney awards are for attorneys with the Law Offices of James Scott Farrin.

Contact the Carolina
Whistleblower Attorneys

If you’re wondering if it’s a good idea to speak with a whistleblower lawyer about what you know, let us set the record straight.

  • Corporate ethics hotlines can be risky and may lead to termination. If you’ve already done this, call us immediately.
  • Your coworkers could be aware of the fraud – or complicit in it – and you should not talk to them about it.
  • The first claim to be filed under the False Claims Act can proceed – if you’re not first, you’re at a serious disadvantage and may get nothing (another reason not to speak to your coworkers about it).
  • A confidential discussion costs you a few minutes, but could save you time, stress, and money.


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