Playboy oilman in a frackload of trouble for spending investors’ money on strippers & hookers
Faulkner, a major donor to state-level Republicans, is being charged with disseminating false and misleading offering materials, misappropriating millions of dollars of investor funds and attempting to manipulate his company’s, Breitling Energy Corporation, stock. The US Securities and Exchange Commission believes that Faulkner defrauded investors to the tune of $80 million.
Faulkner, along with three other related companies and seven other people, is accused of doing less drilling for oil and more drilling for fun.
“Chris Faulkner allegedly orchestrated a sophisticated and multilayered scheme using BECC and its affiliated entities as a conduit to access millions of investor dollars,” Shamoil Shipchandler, regional director of the SEC's Fort Worth office, said in a statement.
The accusations were announced Friday, when the SEC charged the company with fraud and suspended BECC from trading in securities for 10 business days.
The money that was given to Faulkner to drill for oil did less for his investors and more for his social life. Faulkner raked up a great deal of credit card debt on extravagant luxuries, such as chartered planes, jewelry, strip clubs and hookers, the SEC claimed.
In fact, Faulkner had set aside one corporate credit card as the “whore card,” according to the SEC. In 2014, he put $1 million on the “whore card,” charging travel and visits to strip clubs, such as a four-day period where Faulkner spent $40,000 at a Dallas strip club.
The SEC charges aren’t the only thing Faulkner has to worry about. Status Luxury Group, a private concierge service in New York City, has sued Faulkner and Breitling for about $240,000 in unpaid bills, Reuters reported.
Nick Andreottola, owner of Status Luxury Group, was reported to have called Faulkner “a short-fused maniac who uses ‘substances,’ gets drunk and picks fights in high-end Manhattan nightclubs and restaurants,” according to the New York Daily News.
"Andreottola would very quickly begin to see the lifestyle of excess that Faulkner indulged in, seemingly always through funds of Faulkner's companies,” court papers from Status Luxury Group’s 2015 lawsuit said.
It is not only his alleged debaucheries that landed him in hot water. The SEC claims that Faulkner had exaggerated potential earnings for gas prospects and booked fictional drilling costs.
Breitling caught the SEC’s attention after the company stopped filing detailed financial statements with the agency after the former auditor quit in 2015.
Among the many government allegations of misappropriations of investor money, an interesting one involves the other companies named in the lawsuit. Investors gave their money to other companies owned by Faulkner, who then funneled those funds back into Breitling. In addition, he also used the funds to trade in Breitling’s shares themselves to create the appearance of investor interest.
BECC shares were once as high as 95 cents, but are now closer to 2 cents.
Larry Friedman, a lawyer for Breitling and Faulkner, called the accusations "inaccurate and untrue,” telling Reuters: "Nobody can spend $30 million on steak and travel,” and adding, "But this is a competitive business and you spend money to make money. There’s entertainment, there’s international travel.”