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Landman stole mineral rights, prosecutor says

| Wednesday, Aug. 21, 2013, 12:01 a.m.

A Hempfield man allegedly made nearly $1.2 million in a scheme that fraudulently acquired mineral rights for multiple Washington County parcels, according to a federal grand jury indictment filed Tuesday.

Derek A. Candelore, 33, was working as a landman for Penn-Star Energy of Butler County, which acquires mineral rights for oil and gas production on behalf of Range Resources, according to a news release from U.S. Attorney David Hickton.

“The mineral rights ... were stolen by Candelore using forged signatures, fake companies and forged notary signatures and stamps,” the news release states. “Candelore's companies thereafter leased and/or sold the mineral rights to others.”

Candelore is facing mail and wire fraud charges. He could not be reached Tuesday.

Investigators said Candelore is also a resident of White Oak.

According to the indictment, Candelore allegedly:

•Established McComb Hines & Beggs Trust and used the name Kevin Kelly to open a bank account and post office box for fraudulent company Marcellus Land Services in February 2011.

Candelore filed several documents with the Washington County Recorder of Deeds office for a 96-acre parcel there, forging signatures to sell mineral rights to his company, later leasing them to Range Resources and reselling them.

Investigators said Candelore allegedly made about $330,000 in the deals. Checks were first deposited into the created accounts and later transferred into his personal account.

•Received about $251,000 from Range Resources for the lease of mineral rights of a 114-acre property in Hanover Township. Candelore allegedly forged signatures on documents filed in the recorder of deeds office that sold the mineral rights to Davis Minerals.

He allegedly set up a post office box for the fictitious company in Bethel Park in May 2011. The money received was deposited into the Marcellus Land Services account and later transferred into Candelore's personal account.

•Received about $680,000 for the fraudulent sale of two properties in Hanover, one 24 acres and the other 125 acres.

Candelore allegedly created Clark Lumber Co. in November 2011 and opened a post office box and bank account. The rights were sold to his fictitious company then to five Texas financial investment firms doing work in the oil and gas industry, according to the indictment.

The funds were later transferred into Candelore's personal account.

•Received $452,000 from Range Resources for the fraudulent lease of mineral rights to 129 acres in Hanover Township. Blue Bell Minerals was created by another Penn-Star landman referred to as WJR in the indictment.

Six financial investment firms — four in Colorado and two in Texas — sent Candelore $381,000 for the sale of the mineral rights from Blue Bell to them.

In addition to Range Resources, victims in the purported scheme include several mineral rights owners, Pecos Bend Royalties of Texas and Buffalo Royalties business entities, also in Texas.

Candelore is facing a maximum sentence of 120 years in prison, according to the news release. The Postal Inspection Service conducted the investigation.

Renatta Signorini is a staff writer for Trib Total Media. She can be reached at 724-837-5374 or rsignorini@tribweb.com.

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