Continental Resources claims it lost millions of dollars in scams. Here's the latest we know
Jack Money, Oklahoman
Updated 9 min read
Continental Resources headquarters in downtown Oklahoma City.
Continental Resources claims it has lost millions through royalty scams where others purportedly used the company's confidential business resources to acquire mineral rights cheaply, and then make substantial profits through subsequent transactions.
The company launched one civil suit in 2020 and a second one in 2022 that targets specific individuals and companies for roles it claims they played in those alleged schemes.
Allegations contained in its 2020 litigation also have led to federal prosecutors' success in acquiring fraud convictions against four men, including Blaine and James "Jimmy" Dyer. The cousins are targeted as principal defendants in the company's 2020 civil suit.
Continental Resources, some of its current or former employees and other companies also were sued after an oil company employee searched the office of a small independent producer who rented space in a building owned by Blaine Dyer.
Here's the latest we know about the cases.
Continental Resources vs. Dyer, et. al
What it's about:
In a lawsuit it filed on April 20, 2020, Continental Resources accused Blaine Dyer, Jimmy Dyer and numerous co-conspirators of working with at least one of its employees to cheat the company out of millions of dollars "through a series of fraudulent, disguised transactions using Continental's most confidential business information" involving its future drilling plans.
Continental Resources claims the Dyers and their colleagues used its information to acquire large blocks of mineral rights they expected the company would seek to buy or execute leases with owners for before drilling those lands. It claims the Dyers and others then sold those rights to Continental or executed drilling leases with the company at much higher values than what it should have paid.
Judge Bonner ruled in February 2022 the trial against Dyer and the others could proceed after they attempted to have the case thrown out because they claimed Continental didn't follow required guidelines to gather evidence as part of its case.
Continental Resources also added Robert Hefner V and other defendants to its 2020 case at about the same time.
On May 4 2022, Judge Bonner considered a request filed by an attorney representing defendant James "Jimmy" Dyer (Blaine's cousin) that requested to pause the entire civil case until a federal fraud indictment he expected to receive was adjudicated.
Alternatively, attorney Nick Larby, of Larby & Associates, requested the judge to halt any ongoing discovery requests served on James Dyer and his associated companies until the criminal matter was resolved.
Judge Bonner denied James Dyer's requests.
During a later hearing, attorneys for principal parties in the case told Oklahoma County District Court Judge Anthony Bonner they had agreed to use retired Oklahoma Court of Civil Appeals Chief Judge Bill Hetherington as a "special master" in charge of gathering evidence attorneys will use in attempts to prove or disprove Continental Resources' case.
Hetherington, a member of the National Academy of Distinguished Neutrals who retired from the bench in 2016, served as the discovery master in the landmark opioids case, Oklahoma versus Purdue Pharma, et. al, which was tried in Cleveland County District Court. Oklahoma ultimately obtained a $465 million verdict against pharmaceutical giant Johnson & Johnson, Purdue and others, although that verdict was overturned by Oklahoma's Supreme Court about 18 months ago.
"Judge Hetherington's extensive experience on the bench − in addition to his service as a discovery master in one of the most complex civil cases in this state's history − speaks for itself and confirms he is more than qualified," Continental Resources attorneys stated as part of a filing that put his name forward.
Over time, nearly all the defendants in the case have been dismissed.
The latest:
A pretrial conference planned for May, 2024 was delayed while the parties await a ruling on an appeal Continental Resources filed involving a related case.
An order issued in October by Oklahoma County District Court Judge Don Andrews denied Continental Resources' motion to dismiss counter claims brought by Hefner in the case. Continental Resources has appealed that decision to the Oklahoma Supreme Court. Ongoing proceedings in the case before Andrews have been put on hold until the appeal is decided. A month earlier, Andrews agreed to dismiss Hefner Energy Holdings (a business Hefner previously had closed) from the case.
Biggs pleaded guilty to a fraud charge before U.S. District Court Judge Jodi W. Dishman in Oklahoma City on Dec. 16, 2020.
Later, Biggs was ordered by a U.S. Magistrate to avoid having contact with Lindsey Dawn Biggs and to take submit himself to random drug and alcohol testing after prosecutors claimed he had violated that provision of his pre-sentencing release.
What's happening next:
Biggs' sentencing is scheduled for 10 a.m. on June 27, 2024.
United States of America v. Mitchell K. Coatney
What it's about:
Coatney, an attorney who was the law partner with Blaine Dyer, was accused of working with Biggs and others to use confidential Continental Resources information involving its drilling plans to commit honest service wire fraud.
In a filing made in Blaine Dyer's federal case on March 11, 2024 by federal prosecutors, Continental Resources is not seeking any financial restitution from Coatney related to his role in the scheme.
What's happening next:
Coatney's sentencing is scheduled for 1 p.m. on June 27, 2024.
United States of America v. Blaine Dyer
What it's about:
Blaine Dyer, the central figure in the scheme alleged by Continental Resources' 2020 lawsuit, was accused of:
Conspiracy to commit honest services wire fraud.
Seven counts of honest services wire fraud.
Making a false statement on a loan application.
Making a false statement on a promissory note.
What already happened:
Dyer pleaded guilty Feb. 17 before Judge Dishman to a conspiracy to commit honest services wire fraud charge in exchange for the other accusations to be dropped. He faces prison time of up to five years and/or a fine of up to $250,000.
Dyer also agreed as part of his plea to forfeit any proceeds he gained as a result of the nearly decade-long scam, and to provide restitution to Continental Resources in an amount up to $3.5 million.
The Latest:
Dyer, 42, was sentenced May 30, 2024 to five years in prison by Judge Dishman. He also was ordered to forfeit $1,661,263.42, to serve three years of supervised release after being released from prison and to be jointly responsible (along with his cousin, James "Jimmy" Dyer) for paying $2,316,185.43 in restitution to Continental Resources.
What's happening next: He must report to the prison where he is assigned or turn himself into the U.S. Marshals Service July 1.
United States of America v. James 'Jimmy' Dyer
What it's about:
James "Jimmy" Dyer was accused of conspiracy to commit honest services wire fraud and seven counts of honest services wire fraud.
What already happened:
On Feb. 16, 2023, James "Jimmy" Dyer pleaded guilty to a single count of conspiracy to commit wire fraud in exchange for the other charges to be dropped, admitting that he agreed with one or more persons to violate the law, knew the essential object of the conspiracy, knowingly and voluntarily participated and knew there was interdependence among members of the conspiracy.
As part of his deal, Dyer agreed not to appeal his conviction and faced up to 18 months in prison, a fine of up to $250,000 and also agreed to pay restitution to Continental Resources for its losses and to forfeit any cash or property he obtained through the scheme to the federal government.
In a document filed before Judge Dishman on March 11, 2024 by federal prosecutors, it was revealed that Continental Resources successfully negotiated a restitution agreement with Jimmy Dyer.
The Latest:
James Dyer, 39, was ordered by Judge Dishman on May 30, 2024 to serve 18 months in prison and a year in a supervised release program. He also was ordered to pay a forfeiture of $230,761.74 to the U.S. government.
What's happening next: James Dyer must report to the prison he is assigned to on July 29, or turn himself in to Marshals the same day.
Perpetual Production v. Continental Resources, et. al
What it's about:
A case filed May 26, 2021 by Perpetual accuses Continental Resources and several current or former employees, a local realtor, his business and a local financial advisor and his firm of working together to illegally search its offices inside of a building owned by Blaine Dyer. Continental Resources admits it searched spaces inside the building after being tipped that confidential information belonging to Continental Resources was inside the property.
Judge Natalie Mai dismissed Eric Eissenstat from the case. Until his retirement in mid-2021, Eissenstat served as Continental Resources' general counsel, chief risk officer and secretary.
Judge Mai also partially dismissed Samuel Macaluso, Continental Resources' director of corporate security, from the lawsuit, but declined to dismiss him completely.
Judge Mai did not rule on a request made by an attorney representing Kristin Thomas, Continental Resources' chief communications officer, to dismiss her from the case.
She also made numerous rulings on motions seeking to compel discovery and attempts to disqualify an attorney representing Continental Resources.
Continental Resources, Macaluso and Thomas agreed to settle with Perpetual Production for $5,000. The smaller company agreed, and those defendants were dismissed from the case.
The only remaining defendants in the case are Phillip Churchill and Churchill. Brown & Associates.
