Second Marcellus Shale landman pleads guilty in rights scheme

October 15, 2013

The second Marcellus Shale landman accused of stealing mineral rights for dozens of Washington County properties and selling them pleaded guilty in federal court to the elaborate $2.4 million scheme.

Derek A. Candelore, 33, of Jeannette, pleaded guilty Tuesday to one count of mail fraud after federal prosecutors said he and another landman stole drilling rights and sold them for their own profit from February 2011 to June 2012.

U.S. District Judge Arthur Schwab will sentence Candelore on Jan. 31 at the federal courthouse in Pittsburgh.

The other landman, William J. Ray, 29, of Monroeville, on Sept. 18 pleaded guilty to mail fraud in the scheme. Ray faces 33 to 41 months in federal prison when he is sentenced by Schwab Jan. 10.

Both were charged with wire fraud for forging signatures, deeds and other documents to acquire mineral rights to some 40 Washington County properties, which were resold to Marcellus Shale driller Range Resources. The natural gas drilling company said it noticed some “oddities” with the leases and turned over its findings to investigators.

Prosecutors said Candelore “devised and intended to devise a scheme to defraud victims” by funneling their mineral rights to false companies he created before selling them off to make a profit.

Prosecutors said Candelore began in April 2011 by setting up a false statutory trust in Delaware and opened a post office box in Murrysville the following month. He then filed a deed through the Washington County recorder of deeds office May 11, 2011, using forged signatures of landholders.

Candelore pursued similar schemes several more times and secured mineral rights for numerous blocks of land. Prosecutors said he forged signatures, created fake companies and falsified notary signatures and stamps.

He used the aliases of Dan Kun and Kevin Kelly while working for Butler-based Penn-Star LLC to research and pull titles on behalf of Range Resources, according to the federal indictment released in August.

Investigators listed the victims as McComb Hines & Beggs Trust, Davis Minerals LLC, Clark Lumber Co. and Blue Bell Minerals LLC.

Candelore’s attorney, Stephen Stallings, did not immediately return a phone call seeking comment on the guilty plea.

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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