Feds raid business in Basalt
Federal officials from the Internal Revenue Service’s criminal investigations division, the FBI and the Bureau of Land Management conducted a multi-hour search Tuesday at the Basalt office of an oil-and-gas firm that does business throughout Texas, Oklahoma and the Western states.
Roughly 10 officials from the three agencies entered the office of Crystal River Oil and Gas LLC around 9 a.m. They were still in the office as of 4 p.m.
“All I can tell you is we’re here on official business,” said Karen Gurgel, special agent and public information officer for the IRS criminal investigations division. Gurgel said she believed that all the personnel were from the Denver field offices of the three agencies. At least one employee of Crystal River Oil and Gas was at the office when the federal officials arrived, she said.
The Bureau of Land Management oversees leases of federal lands for oil and gas exploration and development. The agency also works with operators on royalty payments for extraction of resources from federal lands.
Black, unmarked vans belonging to the agencies were parked in the back lot of the Crystal River Oil and Gas building at 110 Midland Ave., across from Town Hall and just east of Saxy’s cafe. One officer each from the Basalt Police Department and the Eagle County Sheriff’s Office were stationed outside the building. Basalt Police Sgt. Penny Paxton said she was unable to comment on the federal operation.
Reiner Klawiter is managing principal of Crystal River Oil and Gas and numerous affiliates, according to the firm’s website. Klawiter and his firm own the two-story building at 110 Midland Ave. Dr. Dave Jensen rents the ground floor for his chiropractic and wellness business. Part of the basement is rented by the town of Basalt for storage of archives.
Klawiter has addresses listed in Aspen and Snowmass Village in the telephone book. When reached by phone for comment on the federal operation, he said, “I’ll have to call you back,” and hung up.
The company-profile section of his firm’s website said Klawiter is operations manager for Crystal River Oil and Gas and its affiliates. He oversees operations for 250 wells and evaluates acquisitions, development prospects and liquidations, the website said.
Klawiter worked for large oil firms until 1986, when he founded his own company, KC Resources Inc. His firm’s website described his business philosophy as “acquiring commercially attractive, low-risk oil and gas producing properties from major oil and gas companies.” He would develop the fields fully, with infill wells, and then sell them. That strategy produced profits of $9 million when he sold the Monte Christo field in Texas in November 1997, his website said.
In 1995, KC Resources restructured, and the bulk of its resources went to Crystal River Oil and Gas, according to the firm’s website.
The firm operates more than 300 oil and gas wells in Oklahoma, Texas, Colorado, Kansas, California and New Mexico.
Crystal River’s website was forthright about the dangers of it playing with big boys in the oil-and-gas industry.
“Many other oil and gas companies in the industry have financial resources, personnel, and facilities substantially greater than those of the Company, and there can be no assurance that the Company can effectively compete with these larger entities,” it said.
Seven employees in addition to Klawiter were listed on the website as management or workers. The company also has an office in Cardiff, Calif.
James Spillane, vice president of land marketing, declined comment when reached by telephone. When asked if there was an attorney for the company that questions could be directed to, Spillane replied, “Probably at another time but not now.”
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