Michigan attorney general adds more counts to Chesapeake Energy - WOWK 13 Charleston, Huntington WV News, Weather, Sports

Michigan attorney general adds more counts to Chesapeake Energy complaint

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Chesapeake Energy is facing even more charges in Michigan, where Attorney General Bill Schuette amended his racketeering and fraud complaint against the energy giant to include 12 additional counts of false pretenses.

With the change, Chesapeake now faces a total of 20 charges of false pretenses as well as one count of conducting a criminal enterprise, which he'd filed June 5.

The amended complaint reflects additional victims, Schuette's office said in a release issued Wednesday, June 25.

Meanwhile, the two sides are awaiting a ruling in the state's antitrust case against Chesapeake.

In that case, filed in March in Cheboygan County Court in Michigan, Schuette's office had charged Chesapeake and a division of Calgary-based Encana with one anti-trust violation and one count of attempted anti-trust, alleging they conspired to avoid a bidding war in Michigan's twice-yearly public auctions as well as private negotiations for oil and gas leases, causing lease prices to plummet drastically over a five-month period in 2010.

The alleged violation was reported by the Reuters news agency in 2012 based on a series of emails it obtained discussing an agreement to split up Michigan counties so each company would be an exclusive bidder for both public and private leases in specific areas.The state maintains the alleged conspiracy caused the state-held lease price in Michigan to plummet from $1,510 per acre in May 2010 to less than $40 an acre at the October 2010 auction.

Encana has since settled, pleading no contest to one count of criminal attempted antitrust violations, a misdemeanor, and paying a $5 million fine.

Then, in June, Schuette added the racketeering charges, alleging the company victimized private landowners in the northern part of the state. That complaint suggests Chesapeake directed its land agents to recruit landowners in Northern Michigan to lease their property to them in the summer of 2010, telling them existing mortgages wouldn't be an obstacle. When competition for land in to lease in Northern Michigan waned, Schuette alleges Chesapeake decided the state's oil and gas prospects were not as lucrative as it liked and ordered mass cancellations based on the existence of those mortgages, a process he said the industry calls "cold drafting."

Schuette alleges that Chesapeake prevented its competitors from leasing the land and said Chesapeake, which signed between 700 and 800 leases, honored fewer than 30.

Chesapeake has denied wrongdoing on all counts, calling the allegations baseless and promising to "vigorously defend" itself in court.

A preliminary exam on the state's antitrust case against Chesapeake was completed in May, and the parties are awaiting a ruling from Judge Maria Barton on whether that case will proceed to trial. Schuette had added an additional count of anti-trust violation, a misdemeanor, to the charges against Chesapeake based on evidence presented during the preliminary exam.