United States Recovers Over $137,000 Resolving Allegations that Federal Gas Lessee Violated the False Claims Act

GREAT FALLS— U.S. Attorney Kurt Alme today announced the settlement of a civil lawsuit and recovery of $137,500 in an oil and gas royalty dispute involving federal leases.

The settlement arises from allegations that Charles Janksy, and his two companies, Somont Oil Company and Ferdig Oil Company, violated the federal False Claims Act by failing to pay money owed to the Department of the Interior’s Office of Natural Resources Revenue (ONRR) for natural gas produced from federal leases located in Montana.

Jansky owns or is the controlling shareholder in both Somont and Ferdig.  Somont holds a number of federal gas leases.  The leases obligate Somont to pay the United States royalties on the value of the gas it produces. Each month, companies with federal leases are required to report to ONRR the amount of royalties due and then pay the amount owed.

The settlement resolves claims by the United States that Jansky and Somont failed to properly pay their full royalty obligation for gas produced from Somont’s federal leases in Montana from January 1, 2010 through December 31, 2016.  The United States alleged that Somont and Jansky improperly treated their dealings with Ferdig as arms-length transactions, when in fact, Somont and Ferdig share common ownership.  The United States alleged this caused Somont to knowingly underreport its royalty obligations.

“Companies that extract resources from federal lands must pay what they owe. We will hold accountable any company that tries to avoid its obligations,” said U.S. Attorney Alme.  

“The obligation to properly pay federal mineral royalties is essential to the responsible development of oil and gas from public lands, and we are committed to work with our partners at the Department of Justice, Office of Natural Resources Revenue, and the Office of the Solicitor, to ensure that companies operating federal leases meet their legal responsibilities,” said Ron Gonzales, Special Agent in Charge of the Department of the Interior-Office of Inspector General’s Energy Investigations Unit.

The U. S. Attorney’s Office acknowledges the cooperation and teamwork demonstrated by governmental entities involved in today’s recovery. Special thanks are extended to the Office of Natural Resources Revenue, the Department of the Interior’s Office of the Solicitor, and the Department of the Interior’s Office of Inspector General. 

Assistant U.S. Attorney Megan L. Dishong represented the United States.

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