Grand jury indicts second landman on fraud charges

  • By Barbara Miller September 5, 2013

A federal grand jury in Pittsburgh has indicted a second defendant in an alleged scam in which “landmen” are accused of fraudulently obtaining more than $667,000 in mineral rights on properties containing natural gas in Washington County.

The man identified last month only as “WJR” in the case of landman Derek A. Candelore, 33, of Jeannette, Westmoreland County, was named in the indictment as William J. Ray, 29, of Monroeville.

Ray has been charged with three felony counts of mail fraud and one count of wire fraud in connection with a scheme to obtain checks while acting as a landman, a person who contacts those who own mineral rights on behalf of a natural gas production company to arrange for leases of mineral interests for oil and gas production.

Candelore also allegedly passed himself off as Dan Kun and Kevin Kelly, with addresses of 1209 1/2 Monongahela Blvd., White Oak, Allegheny County, or 125 Woodhaven Drive, Jeannette. Ray’s indictment refers to Candelore as “DAC.”

“It was part of the scheme to defraud that (Ray and Candelore) caused the mineral rights on multiple properties in Washington County to be fraudulently conveyed to business entities” that the men created and controlled, and then caused the business entities to lease or sell the bogus mineral rights to third parties, all without the true mineral rights owners’ knowledge or consent, according to information filed with the clerk of U.S. District Court in Pittsburgh.

In a document filed in Candelore’s case, federal authorities said Ray registered “Blue Bell Minerals” as a limited liability company in Delaware, and in September 2011 opened an account at PNC Bank in the name of Blue Bell Minerals LLC, naming himself as the only authorized signer. Authorities say Ray also rented a post office box in Harwick, Allegheny County, in the name of Blue Bell.

According to the document, in July 2011, Candelore and Ray caused Range Resources Corp. of Fort Worth, Texas, to deliver a $250,958 check for leasing mineral rights to Davis Minerals LLC at a post office box in Bethel Park. Another check for $452,095 was sent Feb. 3, 2012, to Blue Bell Minerals from Range Resources, while a third, for $381,051, was sent Feb. 16, 2012, from Buffalo Royalties LLC of Houston, Texas, to Blue Bell.

On Feb. 8, 2012, Ray allegedly deposited a Range Resources check for $452,095 into Blue Bell Minerals’ PNC Bank account, and later that month, there was a wire transfer from Blue Bell’s account at PNC to an oil and gas company account at Huntington National Bank in Columbus, Ohio.

U.S. Attorney David J. Hickton is seeking forfeiture of at least $543,146 from Ray.

Candelore’s indictment refers to forged signatures of mineral rights owners on three tracts of land in Hanover Township totaling slightly more than 368 acres that were filed with the Washington County recorder of deeds office.

After Candelore’s indictment was made public, Range Resources spokesman Matt Pitzarella said company officials noticed some “oddities” with the leases and worked with the intermediary mineral buyers to conduct an audit of the situation. Soon, they turned over their information to authorities to handle the investigation. He added that the leases Range signed are invalid and the company was working with the proper landowners.

Barbara S. Miller covers politics, Washington County government and a variety of other topics for the Observer-Reporter. She is a graduate of Washington & Jefferson College, majoring in English and history. Follow her on Twitter @reporterbarb.


blog comments powered by Disqus

Man struck by truck in Washington; hospitalized

150-year-old voter lists found in Courthouse Square

Drug arrests made in Monongahela

Guest house opens in Monongahela

Peters Township man jailed for allegedly beating his mother

No tax increase in Robinson budget

Parkway, Fort Pitt Tunnel closures planned

Update planned on Charleroi historic preservation efforts

E. Washington woman pitches ‘Pittsburgh Plaid’ to city council

Could this week’s Mystery Photo be the first day of school?