The Federal Trade Commission yesterday accused a Florida firm of misrepresenting investment opportunities in federal oil and gas lotteries conducted by the Interior Department.
In a suit filed in federal district court in Miami, the FTC accused First Petroleum Corp. of America, a Miami-based firm, two executives and a saleswoman of vastly overstating to clients First Petroleum's success rate in landing leases through the lotteries. The complaint also alleges the company falsely claimed that some of the parcels it competes for on behalf of its clients are known to contain oil and gas, even though federal regulations prohibit such tracts from being offered by lottery.
The FTC asked for a preliminary injunction to bar the alleged activities, and for the refund of money invested by First Petroleum's clients.
First Petroleum President Anthony W. Liggio, reached by telephone late yesterday, called the FTC's allegations "unfair and untrue."
Liggio, one of the executives named in the complaint, said the company's offerings clearly state that the investment is speculative and based on a lottery.
"This here really has me knocked over," said Liggio, who said the company had been in business 3 1/2 years. "It's a nice Christmas present."
First Petroleum's investments are based on land lotteries run bimonthly by the Bureau of Land Management, which awards leases on federal parcels that are in oil and gas areas but which have not been determined to hold petroleum.
Participants in the lottery select the parcel or parcels they wish to win, and pay the government $75 a parcel to enter the drawing. Those who win the parcels must pay a royalty to the government on any oil or gas they find on the land.
According to the FTC complaint, First Petroleum, soliciting clients through telephone and written sales offers, charged customers $300 for a lease application, including in the price the company's evaluation and selection of the property.