Marcellus Shale landman pleads guilty in mineral rights scheme

September 18, 2013

A Marcellus Shale landman indicted earlier this month on charges he and another worker fraudulently obtained and sold mineral rights in Washington County pleaded guilty Wednesday in federal court.

William J. Ray, 29, of Monroeville, pleaded guilty to mail fraud in the scheme in which he acquired mineral rights from several property owners without their knowledge and sold them off to drillers.

Federal investigators said Ray stole $543,146 in the scheme and U.S. Attorney David J. Hickton previously stated he is seeking forfeiture of that money. Ray could also face 33 to 41 months in federal prison when he is sentenced by U.S. District Judge Arthur Schwab Jan. 10.

Ray’s defense attorney, Robert Stewart, did not return a phone call seeking comment on the plea. Assistant U.S. Attorney Nelson Cohen prosecuted the case.

Federal investigators said Ray and Derek A. Candelore, 33, of Jeannette, used their positions as landmen to funnel the mineral rights through false companies they created before selling them off to turn a profit.

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 said Ray and Candelore rented various post office boxes to run the scheme.

They also filed deeds through the Washington County recorder of deeds office using forged signatures of landholders, investigators said.

Candelore, who used the aliases of Dan Kun and Kevin Kelly, worked for Butler-based Penn-Star LLC to research and pull titles, according to the federal indictment. He was indicted Aug. 20 by a federal grand jury on charges of mail fraud and wire fraud for his work in the area from February 2011 to June 2012. Candelore is free on $25,000 unsecured bond while awaiting trial on the charges.

Range Resources officials previously said company officials noticed some “oddities” with the leases and worked with the intermediary mineral buyers to conduct an audit of the situation before turning their information over to authorities to handle the investigation.

Mike Jones has been a news reporter since 2005, covering crime, state and municipal government, education and energy. In addition to working at the Observer-Reporter, he also has spent time at the Charleston (W.Va.) Daily Mail and He holds a journalism degree from West Virginia University.

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