Energy and Environment

Fraud relating to energy and the environment generally include:

  • The underpayment of extraction taxes. Extraction taxes are imposed upon the removal of energy resources such as oil, natural gas and coal from the ground. These taxes are computed upon the amount resources extracted. Fraud is perpetrated by underreporting to the taxing authority the amount of resources actually extracted.
  • The underpayment of royalties. Private companies pay the government for the opportunity to conduct resource exploration on lands owned by the government. Payments are based on, as in the case of extraction taxes, the amount of resources extracted. Fraud is perpetrated by underreporting the extraction or illegal manipulation of the formulas by which the royalties are to be computed.
  • The government often contracts with private companies to reduce or manage its use of energy. The contractor is paid on the basis of energy savings realized. Manipulation of the computations or installation of rigged monitoring devices can and do result in substantial losses to the government. In some cases, these contracts involve the installation of equipment or the performance of services. These contracts are vulnerable to the same fraudulent activities as any other contract—overbilling, delivery of substandard materials, etc.
  • Governments award millions of dollars in grants each year to fund the development of new energy and renewable energy sources. This type of fraud involves falsification of grant applications, falsifying research results, inflating the costs related to the research, and using the proceeds of a grant for personal expense.                            
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General Guidance

Extraction taxes are but one of the types of fraud that involve Energy and the Environment. Check out the sites listed to the right for more information.

Duke Energy's List of Fraud Prevention Tips and Potential Scams to Alert and Protect their Customers

States Develop Task Force with HHS to Address Fraud Prevention in the Low Income Home Energy Assistance Program

State of Connecticut Fraud Early Detection Program Referral and Investigation Handbook

Attorney General Eric Holder’s 4/21/2011 announcement of the formation of a Financial Fraud Enforcement Task Force Working Group to focus specifically on fraud in the energy markets.

General Guidance Extraction taxes are but one of the types of fraud that involve Energy and the Environment. Check out the sites listed to the right for more information.

Duke Energy Warns Customers of New Scam

State of Connecticut Fraud Early Detection Program

States Develop Task Force with HHS to Address Fraud Prevention in the Low Income Home Energy Assistance Program

Attorney General Eric Holder’s 4/21/2011 announcement of the formation of a Financial Fraud Enforcement Task Force Working Group to focus specifically on fraud in the energy markets.