Have you witnessed fraud in the oil and gas industry?

You may have rights to protections and rewards under powerful U.S. laws if you report crime – confidentially.

Given the vast offshore drilling operations worldwide and the drilling and transport within the United States, there is substantial opportunity for waste, fraud, and abuse across the oil and gas industry. As the industry increasingly faces new financial challenges as a result of climate change and the energy transition, the risk of large-scale fraud in the industry will also likely increase.

Here are some actionable frauds that are likely occurring within the oil and gas industry:

Whistleblowers can play a powerful role in detecting and prosecuting fraud in the oil and gas industry. In recent years, a powerful suite of whistleblower laws has been enacted in the United States to enable whistleblowers around the world, including non-U.S. citizens, to report wrongdoing confidentially and to receive financial rewards for contributing to successful prosecutions.

However, whistleblower laws are complex, and it is recommended that whistleblowers consult with a qualified attorney before acting on any information about potential wrongdoing. Through its Legal Assistance Program, the National Whistleblower Center helps connect would-be whistleblowers to attorneys specializing in whistleblower law.

NWC works with an independent public interest law firm, the National Whistleblower Legal Defense and Education Fund (“Fund”), which provides a secure intake form that allows whistleblowers to submit basic information about their case on a confidential basis.

Potential whistleblowers looking for a whistleblower attorney are encouraged to submit their concerns to the Fund’s intake site. Once submitted, the intake form will be reviewed by a highly qualified whistleblower attorney, who may make one of several recommendations.

Submit a Confidential Intake Today

The Laws

Potential whistleblowers have more rights than they may think. In recent years, a powerful suite of whistleblower laws has been enacted in the United States to enable whistleblowers to report wrongdoing confidentially and to receive financial rewards for contributing to successful prosecutions.

Many U.S. laws applicable to fraud within the oil and gas industry have transnational applications. A whistleblower does not need to be a U.S. citizen in order to receive assurances of confidentiality and monetary rewards, and the company engaged in wrongdoing does not need to be U.S.-based in order to be held accountable.

Among the most important whistleblower laws is the Dodd-Frank Act, passed following the financial crisis of 2008-09. Since this law was enacted, the Securities and Exchange Commission and Commodities Future Trading Commission have awarded hundreds of millions (US$) to whistleblowers who exposed fraud in securities and commodities trading and helped produced monetary sanctions in the hundreds of millions (US$) for the benefit of shareholders and economic fairness. The Internal Revenue Code’s whistleblower provisions have produced similar positive results in reining in tax fraud.

Another critically important whistleblower law is the False Claims Act (FCA), which regulates fraud in connection with those receiving compensation or other benefits from the government. In 2019 alone, whistleblowers helped to recover $2.2 billion in monetary sanctions for U.S. taxpayers, with whistleblowers receiving $271 million for their contributions to these successes in 2019.

Meanwhile, the Foreign Corrupt Practices Act (FCPA) allows anyone to report bribery or the falsification of accounting books and records. In 2019 alone, a record $2.6 billion in corporate fines were levied, and there were 54 enforcement actions brought by the FCPA units of the U.S. Department of Justice and Securities Exchange Commission. In 2018, the FCPA received its largest settlement in history following the prosecuting of illegal bid-rigging by Brazil’s state-run oil company Petróleo Brasileiro S.A.

Additionally, the Act to Prevent Pollution from Ships (APPS), a law adopted by the United States following the creation of the International Convention for the Prevention of Pollution from Ships (MARPOL), allows both U.S. citizens and foreign nationals to receive up to 50% of monetary penalties when potential violators are found guilty. Between 2006-2016, the U.S. courts awarded 205 whistleblowers a sum of approximately $33 million in prosecutions under APPS. APPS regulates discharges of pollution from vessels, including oil drilling rigs.

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