Continental Resources claims it lost millions of dollars in scams. Here's the latest we know
Continental Resources claims it has lost millions through royalty scams where others purportedly used the company's confidential business resources to acquire mineral rights cheaply, and then make substantial profits through subsequent transactions.
The company launched one civil suit in 2020 and a second one in 2022 that targets specific individuals and companies for roles it claims they played in those alleged schemes.
Allegations contained in its 2020 litigation also have led to federal prosecutors' success in acquiring fraud convictions against four men, including Blaine and James "Jimmy" Dyer. The cousins are targeted as principal defendants in the company's 2020 civil suit, and Blaine Dyer faces additional pre-sentencing restrictions after being caught with weapons in September 2023 after pleading guilty to a charge he faced.
Continental Resources, some of its current or former employees and other companies also were sued after an oil company employee searched the office of a small independent producer who rented space in a building owned by Blaine Dyer.
Here's the latest we know about the cases.
Continental Resources vs. Dyer, et. al
What it's about:
In a lawsuit it filed on April 20, 2020, Continental Resources accused Blaine Dyer, Jimmy Dyer and numerous co-conspirators of working with at least one of its employees to cheat the company out of millions of dollars "through a series of fraudulent, disguised transactions using Continental's most confidential business information" involving its future drilling plans.
Continental Resources claims the Dyers and their colleagues used its information to acquire large blocks of mineral rights they expected the company would seek to buy or execute leases with owners for before drilling those lands. It claims the Dyers and others then sold those rights to Continental or executed drilling leases with the company at much higher values than what it should have paid.
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The latest:
Arguments involving the case and its parties are still being made before Judge Anthony Bonner in Oklahoma County District Court.
What already happened:
Judge Bonner ruled in February 2022 the trial against Dyer and the others could proceed after they attempted to have the case thrown out because they claimed Continental didn't follow required guidelines to gather evidence as part of its case.
Continental Resources also added Robert Hefner V and other defendants to its 2020 case at about the same time.
On May 4 2022, Judge Bonner considered a request filed by an attorney representing defendant James "Jimmy" Dyer (Blaine's cousin) that requested to pause the entire civil case until a federal fraud indictment he expected to receive was adjudicated.
Alternatively, attorney Nick Larby, of Larby & Associates, requested the judge to halt any ongoing discovery requests served on James Dyer and his associated companies until the criminal matter was resolved.
Judge Bonner denied James Dyer's requests.
During a hearing in late November, attorneys for principal parties in the case told Oklahoma County District Court Judge Anthony Bonner they had agreed to use retired Oklahoma Court of Civil Appeals Chief Judge Bill Hetherington as a "special master" in charge of gathering evidence attorneys will use in attempts to prove or disprove Continental Resources' case.
Hetherington, a member of the National Academy of Distinguished Neutrals who retired from the bench in 2016, served as the discovery master in the landmark opioids case, Oklahoma versus Purdue Pharma, et. al, which was tried in Cleveland County District Court. Oklahoma ultimately obtained a $465 million verdict against pharmaceutical giant Johnson & Johnson, Purdue and others, although that verdict was overturned by Oklahoma's Supreme Court about 18 months ago.
"Judge Hetherington's extensive experience on the bench − in addition to his service as a discovery master in one of the most complex civil cases in this state's history − speaks for itself and confirms he is more than qualified," Continental Resources attorneys stated as part of a filing that put his name forward.
What's happening next?
A September hearing seeks dismissal for one of the case's defendants, while a pretrial conference on the broader case is scheduled in March 2024.
Continental Resources vs. Robert Hefner V, et. al
What it's about:
A case filed on April 22, 2022 accuses Hefner, two of his companies, two other named defendants, five Jane and John Does and five unnamed entities of working with one of Continental Resources' former employees to use the company's confidential drilling plans in a scheme to acquire, hold and resell mineral rights.
The latest:
Numerous motions and counter motions seeking evidence plus a moves to limit or dismiss the case are pending before Oklahoma County District Court Judge Don Andrews.
What already happened:
In May 2022, Judge Andrews declined requests to throw the lawsuit out entirely. However, Andrews agreed in September 2022 to dismiss Hefner Energy Holdings (a business Hefner previously had closed) from the case.
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What's happening next?
Judge Andrews will consider arguments on various pending motions in October.
United States of America v. Justin Biggs
What it's about:
Biggs, a one-time senior landman at Continental Resources, was accused of working with a co-conspirator he had hired to secure mineral rights for the company and others to use confidential company information to commit honest services wire fraud.
The latest:
Biggs was ordered by a U.S. Magistrate in September to avoid having contact with Lindsey Dawn Biggs and to take submit himself to random drug and alcohol testing after prosecutors claimed he had violated that provision of his pre-sentencing release.
What already happened:
Biggs pleaded guilty to a fraud charge before U.S. District Court Judge Jodi W. Dishman in Oklahoma City on Dec. 16, 2020.
What's happening next:
Biggs (who remains free on bond) could be required to serve up to five years in prison, be required to pay a fine of up to $250,000 and could be required to participate in a two-year program of supervised release. A sentencing hearing has not been scheduled.
United States of America v. Mitchell K. Coatney
What it's about:
Coatney, an attorney who was the law partner with Blaine Dyer, was accused of working with Biggs and others to use confidential Continental Resources information involving its drilling plans to commit honest service wire fraud.
What already happened:
Coatney pleaded guilty to a fraud charge before Judge Dishman on Oct. 6, 2021.
What's happening next:
Coatney (who remains free on bond) could be required to serve up to five years in prison, be required to pay a fine of up to $250,000 and could be required to participate in a two-year program of supervised release. He has not yet been sentenced.
United States of America v. Blaine Dyer
What it's about:
Dyer, the central figure in the scheme alleged by Continental Resources' 2020 lawsuit, was accused of:
Conspiracy to commit honest services wire fraud.
Seven counts of honest services wire fraud.
Making a false statement on a loan application.
Making a false statement on a promissory note.
What already happened:
Dyer pleaded guilty Feb. 17 before Judge Dishman to a conspiracy to commit honest services wire fraud charge in exchange for the other accusations to be dropped. He faces prison time of up to five years and/or a fine of up to $250,000.
Dyer also agreed as part of his plea to forfeit any proceeds he gained as a result of the nearly decade-long scam, and to provide restitution to Continental Resources in an amount up to $3.5 million.
The Latest:
Dyer's home and office were searched by FBI agents on Sept. 7, where numerous weapons were recovered.
What's happening next:
Dyer faces potential tightened rules to follow if he wishes to remain free until his formal sentencing. An expedited hearing has been set by Judge Dishman giving Dyer's attorneys until Sept. 22 to respond to the government's request and giving the government until Sept. 26 to respond to any filing Dyer's attorneys make. Dishman could issue a ruling without a hearing, court records show.
United States of America v. James 'Jimmy' Dyer
What it's about:
James "Jimmy" Dyer was accused of conspiracy to commit honest services wire fraud and seven counts of honest services wire fraud.
What already happened:
On Feb. 16, 2023, James "Jimmy" Dyer pleaded guilty to a single count of conspiracy to commit wire fraud in exchange for the other charges to be dropped, admitting that he agreed with one or more persons to violate the law, knew the essential object of the conspiracy, knowingly and voluntarily participated and knew there was interdependence among members of the conspiracy.
As part of his deal, Dyer agreed not to appeal his conviction. He faces up to 18 months in prison, a fine of up to $250,000 and also agreed to pay restitution to Continental Resources for its losses and to forfeit any cash or property he obtained through the scheme to the federal government.
What's happening next:
Jimmy Dyer remains free on bond. A sentencing hearing before Judge Dishman has not yet been scheduled.
Perpetual Production v. Continental Resources, et. al
What it's about:
A case filed May 26, 2021 by Perpetual accuses Continental Resources and several current or former employees, a local realtor, his business and a local financial advisor and his firm of working together to illegally search its offices inside of a building owned by Blaine Dyer. Continental Resources admits it searched spaces inside the building after being tipped that confidential information belonging to Continental Resources was inside the property.
What already happened:
In September, Perpetual filed a second amended petition that sought at least $10,000 from Continental Resources.
Judge Natalie Mai dismissed Eric Eissenstat from the case. Until his retirement in mid-2021, Eissenstat served as Continental Resources' general counsel, chief risk officer and secretary.
Judge Mai also partially dismissed Samuel Macaluso, Continental Resources' director of corporate security, from the lawsuit, but declined to dismiss him completely.
Judge Mai did not rule on a request made by an attorney representing Kristin Thomas, Continental Resources' chief communications officer, to dismiss her from the case.
She also has made numerous rulings on motions seeking to compel discovery and attempts to disqualify an attorney representing Continental Resources (that attempt was rejected by the judge).
What's happening next:
Filings in the case continue to be made.
This article originally appeared on Oklahoman: Continental Resources civil, related criminal cases updates provided
