Aubrey McClendon, the former CEO of Chesapeake Energy Corp., was charged Tuesday with orchestrating a conspiracy not to compete for oil and gas leases in northwest Oklahoma, the Justice Department said.
"Chesapeake does not expect to face criminal prosecution or fines relating to this matter", a company spokesman told Reuters. If the charges are proved right, the previous Chesapeake Energy CEO could face up to 10 years in prison and a $1 million fine for each violation.
McClendon is now chairman of American Energy Partners, a private company that seeks investments in shale fields globally. "Executives who abuse their positions as leaders of major corporations to organize criminal activity must be held accountable for their actions".
According to the indictment, filed in the U.S. District Court for the Western District of Oklahoma, McClendon arranged with another company to manipulate competitive bidding processes by agreeing not to bid against each other. No companies or other conspirators were named in the indictment.
Both Chesapeake and SandRidge, once storied firms in Oklahoma's oil industry, have recently engaged restructuring experts as they scramble to pay off billions in debt and avoid potential bankruptcy. Chesapeake has sunk 39 percent this year, including losing a third of its value in a single day last month after a report, which the Oklahoma City- based company denied, that it had hired lawyers for potential bankruptcy.
Chesapeake subsequently revealed that it was the subject of an inquiry from the Securities and Exchange Commission, and announced that the program through which McClendon acquired his stakes would be terminated.
As it stands Chesapeake is the second biggest producer of natural gas in the United States.
His office says this is the first time someone in the oil and gas industry has faced charges resulting from a federal antitrust investigation. The state of Michigan made similar allegations against Chesapeake and the company settled that case for $25 million previous year. Until recently it has been one of the largest and most active drillers in the Marcellus Shale.
According to The Wall Street Journal, the grand jury charged McClendon with bid-rigging for a five-year period between 2007 and 2012.
The conspiracy took place between December 2007 and March 2012, the indictment alleges.
McClendon was a co-founder of Chesapeake in 1989.