Dallas ‘Frack Master’ gets 15 years in federal prison for securities fraud, tax evasion
Christopher A. Faulkner of Dallas was sentenced to 15 years in federal prison in September for cheating investors out of millions and concealing money from the Internal Revenue Service, according to Chad Meacham, acting U.S. attorney for the Northern District of Texas.
Faulkner, also known as the “Frack Master,” is a former Bedford tech entrepreneur turned Texas oil and gas mogul who was arrested in June 2018 and pleaded guilty in October 2018 to securities fraud, engaging in illegal monetary transactions and tax evasion. He withdrew the guilty plea after being declined a binding 12-year sentence, before pleading guilty again in December 2020, Meacham said in a news release.
Meacham said plea papers revealed that from 2011-2016 Faulkner raised over $71 million from working interest investors, but in marketing materials distributed to the investors, he inflated the estimated drilling costs by as much as 800 percent. Three companies, Breitling Energy Corp., Crude Energy LLC and Patriot Energy Inc., were able to pocket the difference between Faulkner’s projections and the actual costs.
U.S. District Judge Jane Boyle also ordered Faulkner to pay $92.4 million in restitution to his victims, Meacham said.
Over a five-year period, Faulkner admitted to diverting about $23 million for his own benefit, “shelling out hundreds of thousands of dollars at a time for luxury travel, professional concierge services, maintenance of multiple residences, and at least seven vehicles, including an Aston Martin, a Bentley, and a Mercedes Benz,” the release said. During that time, his companies paid out only $6.2 million to investors, according to the criminal complaint filed in June.
In June 2016, Faulkner settled with the Securities & Exchange Commission over allegations of multiple federal securities laws violations, where he had to pay $23.8 million. The settlement also prevents him from serving as an officer or director of any SEC-reporting company and from participating in any penny-stock offering, Meacham said.
