US 'frack master' accused of $80m fraud to fund debauched lifestyle

A supposed fracking expert who toured the world's media calling himself the 'Frack Master' and even gave evidence to MPs was actually a massive fraudster who duped investors out of millions of pounds to fund "a lifestyle of decadence and debauchery", US investigators have alleged.

Chris Faulkner, chief executive of the Texas-based Breitling Energy Corporation, "orchestrated a massive, multi-pronged, and fraudulent scheme" that defrauded investors of $80m since 2011, the Securities and Exchange Commission alleged.

Faulkner "brazenly misappropriated at least $30m of investors’ funds for extravagant personal expenses, including lavish meals and entertainment, international travel, cars, jewelry, gentlemen’s clubs, and personal escorts", it claimed.

Faulkner was touted as an expert pundit to the UK media between at least 2012 and 2015, via press releases referring to him as "the US’s acknowledged expert" and calling Breitling "a leading US oil and gas business".

He secured coverage in several newspapers, appeared on the BBC and Sky News, and was called to testify as a witness in a Parliamentary inquiry on shale gas where he gave evidence for more than half an hour in 2013.

He was also a "recurring guest" on North American TV stations including CNBC, CNN International and Fox Business News, the SEC noted in a release.

But according to the SEC, in 2010 when Faulkner founded Breitling Oil and Gas Corporation, the initial company he used for the alleged fraud, he had no experience in the oil and gas industry.

The SEC alleges: "Faulkner misrepresented his education, experience, and background. He claimed to have earned master’s and doctorate degrees from universities, which he had not. He represented that he had extensive and diverse experience 'in all aspects of oil and gas operations,' when he had no such experience.

"In fact, his only exposure to the oil-and-gas industry was through website data hosting work he and his prior company, C I Host, performed for oil-and-gas companies.

"Yet, he promoted himself as an expert in the oil-and-gas industry, even branding himself as the 'Frack Master'. He also paid a public relations firm to promote him and to book appearances on television and radio shows."

The heart of the alleged fraud, according to the SEC, involved "knowingly lying to investors about how much it would likely cost to drill and complete the wells and how much the investments would likely earn".

It alleges Faulkner and others accused "baselessly and grossly inflated" the actual costs of drilling, allowing them to "pocket millions of dollars in illicit profits".

Chris Faulker, Breitling

Chris Faulker, Breitling Credit: Breitling Energy

They allegedly used overestimates of the likely oil and gas production, which Faulkner then "indiscriminately increased" to entice investors with returns they had "virtually no chance of ever receiving".

"After duping investors to obtain their funds, Faulkner misappropriated a significant portion to live extravagantly and excessively," it alleged.

Faulkner spent more than $1m on a credit card that he referred to as his "whore card", paid for using investors' cash, including "nearly $40,000 in charges at a Dallas gentlemen’s club over a four-day period in July 2014", the SEC claims.

Breitling Energy could not be reached for comment.

However, Faulkner's lawyer told Reuters the allegations were "inaccurate and untrue" and that his companies raised money for legitimate purposes.

He also disputed the allegations around Faulkner's personal expenditure, insisting: "Nobody can spend $30m on steak and travel."

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