(Reuters) - A Texas oil and gas businessman who called himself the “Frack Master” has been charged with securities fraud in connection with a scheme that defrauded investors out of $62.6 million, U.S. prosecutors said on Thursday.
Christopher Faulkner, 41, was arrested on Monday at the Los Angeles International Airport and charged in a criminal complaint filed in federal court in Dallas, Texas, prosecutors said.
The criminal charges came two years after the U.S. Securities and Exchange Commission sued Faulkner, a frequent media commentator on oil-and-gas topics, and his Dallas-based Breitling Energy Corp and accused them of fraud.
The complaint charged the Dallas resident with securities fraud, mail fraud and money laundering. A lawyer for Faulkner did not immediately respond to a request for comment.
According to the complaint, from 2009 to 2016, Faulkner established several companies through which he acquired and then sold to investors working and royalty interest in oil and gas prospects in Texas, Oklahoma, Kansas and North Dakota.
That included Breitling, which became a publicly traded company in 2013 through a so-called reverse merger, the complaint said.
Prosecutors said that Faulker and his companies made fraudulent misrepresentations to investors by, among other things, hyerinflating the estimated costs of drilling and testing wells.
In total, Faulkner raised over $62.6 million from investors, prosecutors said.
They said that Faulker diverted a significant amount of that money for his own benefit and to fund a lavish lifestyle that included expensive vehicles, jewelry and chartered flights.
The case is U.S. v. Faulkner, U.S. District Court, Northern District of Texas, No. 18-mj-407.
Reporting by Nate Raymond in Boston; Editing by Tom Brown