Woman pleads guilty to submitting false extraction reports

A Farmington woman has pleaded guilty to submitting false and inaccurate oil and gas extraction reports and failing to pay taxes to the Jicarilla Apache Nation, Navajo Nation and the federal government.

Teresa McCown, the owner of M&M Production & Operation and Shoreline Oil & Gas Co., faces up to 20 years in prison. However, federal prosecutors are recommending that she serve one day in prison, be on supervised release for three years and pay $208,000 in restitution, according to a copy of the plea agreement.

She pleaded guilty Friday to eight counts of wire fraud and violations of Federal Royalty Management and Enforcement.

In the plea agreement, McCown also said she would write an apology to the two tribes.

McCown’s attorney and the U.S. Attorney’s Office for the District of New Mexico couldn’t be reached for comment on Friday.

McCown’s business operated dozens of oil and gas wells across federal and tribal land. In exchange for extracting oil and gas, producers have to pay royalties to governments.

The fees are determined by reports oil and gas companies file.

McCown underreported her companies’ oil and gas production. She admitted in her plea agreement to filing more than 400 incorrect reports between 2017 and 2023.

She was indicted in February.

“As a lease operator, I am responsible for the accounting and reporting of mineral production from leased lands, and I am responsible for the payment of royalties to the mineral interest owners for my companies’ shares of the gas and minerals removed from the leased lands,” McCown said in the plea agreement. “I admit that M&M went weeks, months, and even years without providing 20l4s to (the Office of Natural Resources Revenue). I also admit that there were numerous other reports that had been filed which were inaccurate.”

ONRR issued McCown a notice of noncompliance for not filing proper reports. During pre-penalty teleconferences in 2020 and 2022, McCown made excuses for the reports that hadn’t been properly filed.

“I offered no relevant mitigating circumstances and ONRR maintained the civil penalty assessments. Rather, I gave various excuses blaming medical ailments and fired employees for not properly reporting the well sites,” McCown said. “In reality, the legal responsibility had been mine.”

U.S. District Judge David Urias is presiding over the case and will have to accept the plea agreement. A sentencing hearing hasn’t been scheduled.

In the plea agreement, McCown agreed to immediately liquidate property in San Juan and Rio Arriba counties, a recreational vehicle, a 2021 BMW X3 and a 2008 Ford F-150 in order to pay restitution.