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Financial Fraud Law

Protesting with Fake Oil and Gas Bids Leads to Prison

 Under federal law, the Bureau of Land Management (BLM) in each state with eligible lands is required to auction off oil and gas leases on a quarterly basis. At these auctions, the minimum bid is two dollars per acre, but the amount of the winning bid can vary significantly. In addition to the final auction price, successful bidders must pay an annual rental of $1.50 per acre per year for the first five years of the lease ($2 per acre per year thereafter) and pay a royalty of 12.5 percent on the oil or gas produced from the lease.
 
Now, suppose you think that drilling on these lands is bad for the environment and you want to protest. Suppose you protest by going to the auctions, representing that you are a bidder, driving up the auction prices, and winning some bids – and suppose you then don’t pay. Good idea or bad idea?
 
Bad idea.
 
Tim DeChristopher, a student at the University of Utah, entered a BLM oil and gas lease auction in Salt Lake City, Utah, by representing he was a bidder, intending to disrupt the auction and call attention to the potential environmental harms of drilling on the leases. He proceeded to drive up the auction prices and ultimately won almost $1.8 million in bids, for which he was unable to pay. A jury convicted him of interfering with the provisions of Chapter 3A of the Federal Onshore Oil and Gas Leasing Reform Act, in violation of 30 U.S.C. § 195(a)(1), and making a false statement or representation in violation of 18 U.S.C. § 1001. The district court sentenced DeChristopher to 24 months’ imprisonment and three years’ supervised release, and DeChristopher appealed.
 
Now, the U.S. Court of Appeals has affirmed his conviction. Among other things, it rejected his argument that his First Amendment right to protest had been violated.
 
The case is U.S. v. DeChristopher, No. 11-4151 (10th Cir. Sept. 14, 2012). Attorneys involved include Ronald James Yengich, Yengich, Rich & Xaiz, (Elizabeth Hunt, Elizabeth Hunt LLC, and Patrick A. Shea, Patrick A. Shea P.C., with him on the brief), Salt Lake City, Utah; and Dave Backman, Assistant United States Attorney (David B. Barlow, United States Attorney, with him on the brief), Salt Lake City, Utah.