(Image courtesy of Chesapeake Energy)

The state of Michigan filed felony racketeering and fraud claims Thursday against Chesapeake Energy, saying the company canceled hundreds of land leases on false pretenses while trying to lock out competitors for oil and gas rights.

Bill Schuette, Michigan Attorney General, said Chesapeake, working through leasing agents, harmed northern Michigan landowners when it canceled leases.

According to the complaint, Chesapeake allegedly signed leases  with as many as 800 landowners in Michigan but honored less than 30.

The state alleges that the leases were canceled on claims that mortgages on properties were a legitimate basis for termination.

According to the state, landowners were previously told the mortgages were not a problem.

“I will defend and protect the taxpayers of Michigan in the face of fraudulent business practices,” Schuette said in a press release.

Chesapeake said it will fight the charges brought against it.

“We believe this action has no merit and we will vigorously contest these baseless allegations,” Chesapeake spokesman Gordon Pennoyer said.

Chesapeake’s arraignment is scheduled for June 25.


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