Federal Reports

The OIG investigated allegations that a gas marketing company, B. Charles Rogers Gas, Ltd. (BCR), underreported natural gas liquid volumes and overcharged companies producing gas from Federal wells in New Mexico, which resulted in a loss of Federal and tribal mineral royalties.We found that Billy Charles Rogers, Jr., and Wynon Rogers, co-owners of the BCR, and Thomas R. Lutner, III conspired to defraud approximately 30 oil and gas companies. From 2003 through 2015, the BCR purchased gas from companies with Federal, Indian, State, and private leases in the San Juan Basin area of New Mexico and Colorado. Lutner, who worked as a gas supply originator, then purchased aggregate gas packages from the BCR. The Rogerses and Lutner then provided producers false transaction statements in connection with the BCR’s gas purchases that underreported the volume and value of the natural gas liquids that the BCR purchased. Lutner and the Rogerses knew the true volumes and prices for the natural gas liquids, but the BCR provided producers with false monthly statements and paid them far less than what the BCR owed. The Rogerses then shared the fraudulent profits with Lutner.As a result of the BCR’s fraud scheme, the victim companies relied upon the false gas marketing statements issued to them by the BCR and unknowingly failed to properly calculate mineral royalties associated with Federal and tribal leases. The companies thus paid less in royalties than they should have.The United States Attorney’s Office for the Northern District of Texas criminally prosecuted this case, resulting in guilty pleas by all three co-conspirators for violating Title 18 U.S.C. § 371, conspiracy to commit wire fraud. Charles and Wynon Rogers were each sentenced to serve 6 months in prison and 2 years of probation and ordered to pay joint restitution totaling $7,718,876.60. Lutner was sentenced to serve 10 months in prison and 1 year of probation and ordered to pay restitution totaling $16,900,737.66. As a result, over $24.6 million was returned to the oil and gas companies victimized by this criminal conspiracy.Additionally, the three subjects paid approximately $4.375 million to settle a civil false claims act case with the Department of Justice’s Civil Division. The funds received recovered unpaid Federal mineral royalties the subjects owed to the Office of Natural Resources Revenue (ONRR).

The North Bay Processing and Distribution Center is in the San Francisco District of the Pacific Area. During fiscal year (FY) 2019, it manually processed 17.7 million letters, almost 800,000 flats, and 1.2 million parcels. It is much more cost effective for mail to be processed on mail processing equipment. In FY 2019, the average productivity for letters processed on mail processing equipment was 7,299 mailpieces per hour while the average productivity for manually processed letters was 1,163 mailpieces per hour. The North Bay P&DC’s FY 2019 manual letter productivity of 4,165 mailpieces per hour was significantly higher than the national average productivity of 1,163 mailpieces per hour. Our objective was to assess the North Bay P&DC’s manual letter processing operations.

Due to the impact of first‑line supervisors on Postal Service operations, the OIG sought to gain an understanding of the structure, footprint within the organization, and investments made in first‑line supervisors. As such, key human capital and performance data related to first‑line supervisors was examined to assess patterns of historical performance, evaluate comparability across various categories, and identify relationships between first‑line supervisors and key performance metrics. This white paper provides the results of our assessment, including analyses of key operational, performance, and cost metrics that impact Postal Service operations.

The La Vergne Post Office is in the Tennessee District within the Eastern Area. This unit has 18 rural delivery routes (including one auxiliary route) delivered by 26 carriers (17 full time and 9 part time). We chose the La Vergne Post Office based on the number of stop-the-clock (STC) scans occurring there. We used geolocation data to identify units with STC scans that occurred at the delivery unit instead of the intended delivery address. The La Vergne Post Office had 17,611 STC scans at the delivery unit between June and August 2019.

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