DALLAS (CBSDFW.COM) – Dallas businessman Christopher Faulkner, who dubbed himself the “Frack Master” and was a frequent media commentator, has pleaded guilty to fraud and tax evasion charges in an $80 million scam.
The Texas oil-and-gas mogul entered his plea Tuesday after admitting he bilked investors out of millions of dollars and concealed millions more from the IRS.
Faulkner faces up to 12 years in federal prison and possible repayment of investors.
Prosecutors said between 2011 and 2016, Faulkner raised about $71 million from working interest investors, plus millions more related to potential royalties, then diverted $23 million for himself.
In marketing materials distributed to investors, Faulkner inflated the estimated drilling cost by as much as 800 percent, allowing his three companies – Breitling Energy Corp., Crude Energy, LLC and Patriot Energy, Inc. – to pocket the difference between his projections and the actual cost of the wells.
“As Mr. Faulkner continued to deceive his investors about drilling expenses and potential oil well output, he spent their millions of investment dollars on his lavish lifestyle, ” U.S. Attorney for the Northern District of Texas Erin Nealy Cox said in a press release statement.
Faulkner, 41, admitted spending hundreds of thousands of dollars at a time on luxury travel, professional concierge services, the maintenance of several homes, and at least seven vehicles, including an Aston Martin, a Bentley, and a Mercedes Benz.
After an FBI raid on his offices in Dallas in 2016, Faulkner was arrested in 2018 at the Los Angeles International Airport, and later brought back to Texas.
A Securities and Exchange Commission lawsuit against Faulkner was settled Tuesday. He must repay nearly $24 million.