‘Frack Master’ agrees to deal, sentenced to 12 years in prison
The self-proclaimed “Frack Master” Chris Faulkner of Breitling Energy agreed to a plea deal with a 12-year prison sentence for securities fraud, money laundering and tax evasion, the federal government said.
The U.S. Securities and Exchange Commission charged Faulkner in 2016 with leading a wide-ranging securities-fraud scheme that raised about $80 million from hundreds of investors nationwide to help fund a lifestyle of “decadence and debauchery,” including luxury vehicles, private jets, multiple residences, exotic dancers and sex workers.
The SEC and Justice Department announced the settlement agreement and prison sentence on Tuesday. Faulkner, 41, was accused of systemically deceiving investors with false information while misappropriating millions of dollars of investor funds and manipulating the stock of Breitling Energy.
Faulkner was an outspoken advocate of the energy sector, especially shale drilling and hydraulic fracturing, called “fracking.” He frequently made television appearances promoting the industry.
The settlement requires that Faulkner repay $23.8 million he illegally misused, the SEC said.
The FBI raised Faulkner’s Dallas office in April 2016, and the SEC charges followed two months later. He was arrested this summer at the Los Angeles International Airport and transported back to Texas. Faulkner also had embarked on an illegal real estate scheme in California, the SEC alleged.
“Faulkner first proclaimed himself the ‘Frack Master’ in order to deceive investors about his expertise and steal millions of dollars to fund his lifestyle, and the SEC put an early end to his second effort to defraud investors in a real estate scheme,” said Shamoil Shipchandler, director of the SEC’s Fort Worth regional office. “Today’s serious civil and criminal sanctions serve as a warning to anyone who intends to target retail investors.”
The Justice Department said that in investor presentations, Faulkner inflated the estimated drilling costs of wells by as much as 800 percent so he and his companies could pocket the money. He also relied on a socalled geology report from someone on his payroll who was supposedly an independent expert. The report consistently overstated the potential of the oil and gas wells.
Prior to the plea deal, Faulkner had faced a maximum penalty of 35 years in prison.
Faulkner is currently in federal prison in Seagoville outside of Dallas.