Louis Dreyfus Energy Services settles False Claims Act Allegations for $4 million

The Department of Justice announced Tuesday, July 3, 2012,  the $4 million settlement between the United States and Louis Dreyfus Energy Services under the False Claims Act resolving allegations that the energy company failed to pay monies owed for natural gas it acquired under contracts with the Department of Interior.

In 2004, Louis Dreyfus Energy Services, a Connecticut based energy company involved in the merchandising, transporting, trading and storing of natural gas, agreed to pay the Interior Department for natural gas based on a price associated with the delivery of gas at a fixed point along a natural gas pipeline.  After execution of the contracts, the company requested and was granted a price discount for obtaining the gas in the instances wherein due to complete or near-complete constraint in the pipeline, Louis Dreyfus Energy Services would not be able to transport the natural gas along the pipeline.

The United States alleged under the False Claims Act that from December 2004 to March 2008, the company made false claims or misleading statements when requesting the discounted price under its contracts.  The government stated that Louis Dreyfus Energy Services requested the price discount from the Department of Interior even on days when it was able to transport the natural gas along the pipeline.  The United States alleged that the company was not entitled to the price discounts it sought and received from the Department of the Interior.

The claims that were resolved under the settlement agreement were only allegations and there has been no determination of liability.

Posted in False Claims, Federal False Claims Act, Other Kinds of Fraud, Qui Tam, SettlementsNo Comments


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