So your probably sitting there with this Civil Investigative Demand from FERC, DOJ, or DOE about energy fraud and your entire business is imploding. Maybe you manipulated electricity markets. Maybe there’s issues with renewable energy tax credits. Or maybe your just caught up in there latest oil and gas royalty sweep. Look, we get it. Your ABSOLUTELY PANICKED. And you should be! Because FERC is seeking $722 MILLION in penalties and executives are getting 63 MONTHS in federal prison!
What Makes Energy Sector Investigations So Devastating?
Let me explain the energy nightmare your facing. FERC’s Office of Enforcement has unlimited investigative powers and DOJ’s Environmental and Natural Resources Division wants to destroy “market manipulators”!
Energy fraud covers EVERYTHING – electricity market manipulation, natural gas trading violations, renewable energy credit fraud, oil and gas royalty theft, and tax credit schemes! Every trade, every report, every credit claim becomes potential fraud! We’ve seen legitimate energy companies bankrupted over algorithmic trading!
Here’s what’s really scary – David Dunham got convicted for $50 MILLION in fraudulent renewable credits! The biofuel scheme? $1 BILLION in false claims! Your facing catastrophic liability for paperwork!
How Crushing Are Energy Fraud Penalties?
Hold onto your drilling rights because these numbers will destroy everything!
Biofuel fraudsters ordered to pay $442 MILLION in restitution! Solar scheme promoters disgorged $50 million! Hilcorp paid $34.6 million for royalty underpayments! These aren’t Enron-sized frauds – there regular energy companies!
Criminal penalties are CATASTROPHIC – renewable fuel fraud got 63 months prison! Market manipulation carries 20 years! False reporting to FERC? 5 years! Wire fraud for each transaction? Another 20 years! We’ve seen energy traders face 50+ year sentences!
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(212) 300-5196What About Market Manipulation?
Market manipulation prosecutions are EXPLODING! FERC opened 19 new investigations in 2023 alone!
Virtual bidding strategies? MANIPULATION! Congestion trading? Fraud! Even legitimate hedging gets twisted into criminal conspiracy! We’ve seen traders imprisoned for strategies every fund uses!
FERC’s definition is impossibly broad – ANY action that affects price can be manipulation! Used an algorithm? Manipulative device! Changed positions based on weather? FRAUD! One trader got prosecuted for trades that MADE the market more efficient!
Todd Spodek
Lead Attorney & Founder
Featured on Netflix's "Inventing Anna," Todd Spodek brings decades of high-stakes criminal defense experience. His aggressive approach has secured dismissals and acquittals in cases others deemed unwinnable.
What Triggers Energy Fraud Investigations?
Your probably wondering “How did FERC find out?” Let me tell you what puts energy companies in there crosshairs:
Your natural gas trading company just received a Civil Investigative Demand from the DOJ demanding five years of trading records, internal communications, and profit-and-loss statements related to alleged price manipulation in the wholesale energy market. The CID gives you only 30 days to produce thousands of documents, and your compliance team is overwhelmed trying to figure out what's privileged and what must be turned over.
Can I push back on the scope of this CID, or do I have to hand over everything they're asking for?
You absolutely can and should challenge an overly broad CID — courts have consistently held that Civil Investigative Demands must be reasonable in scope and not unduly burdensome under the False Claims Act, 31 U.S.C. § 3733. We would file a petition to modify or set aside the CID, narrowing the document requests to relevant time periods and specific trading desks while asserting attorney-client privilege and work product protections where applicable. At the same time, we need to immediately implement a litigation hold across your organization to preserve all responsive documents, because spoliation of evidence in a federal energy fraud investigation can lead to obstruction charges under 18 U.S.C. § 1519. The key right now is strategic compliance — cooperating enough to avoid a federal court enforcement action while protecting your legal rights at every step.
This is general information only. Contact us for advice specific to your situation.
FERC’s enforcement hotline gets thousands of tips! Competitors report “suspicious” trading! Former employees seeking revenge! Even market monitors flag normal volatility as manipulation!
ISO/RTO surveillance is everywhere! Every bid monitored! Every trade analyzed! Algorithms flag “anomalies” that are just market conditions! We’ve seen investigations triggered by profitable trades during Texas freezes!
