DALLAS (CN) — A Texas federal judge accepted the revised guilty plea Tuesday of self-proclaimed “Frack Master” Christopher Faulkner, who leveraged limited business experience and fake college degrees to raise over $80 million from oil and gas investors to fund an extravagant lifestyle.
U.S. District Judge Jane Boyle accepted Faulkner’s agreement to plead guilty to charges of securities fraud, aiding, abetting and tax evasion. He faces up to 15 years in federal prison and up to $250,000 in fines. Boyle, a George W. Bush appointee, will sentence Faulkner on April 1.
Boyle had previously rejected a similar plea agreement between the Justice Department and Faulkner in April 2019. He had faced up to 12 years in federal prison under that agreement.
“You can go back to the drawing board,” she said at the time. “I just don’t think it’s enough.”
Boyle repeatedly asked Faulkner, 43, during his hearing Tuesday if he understands he is waiving his right to appeal by pleading guilty.
“This sentence means it is the end of the case, except for limited, narrow circumstances. Do you understand that?” Boyle asked.
“Yes, your honor,” Faulkner replied.
Under the deal, Faulkner will forfeit to the U.S. Securities and Exchange Commission over $250,000 held in three bank accounts and two oil paintings by artist Alec Monopoly.
Faulkner appeared remotely at the hearing in an orange prison jumpsuit while sporting a long grey beard. It was a far cry from the short hair and suits he wore when he made numerous appearances on cable financial news channels commenting on the energy industry several years ago.
Faulkner told the judge he had completed two years of college courses. The SEC claims Faulkner used phony postgraduate degrees to convince media networks and business leaders that he was an energy expert despite having no prior experience in the oil and gas industry. His experience amounted to website hosting for companies in the industry.
He originally pleaded guilty to the charges in October 2018, which also settled a federal civil lawsuit brought by the SEC in 2016. The agency claimed Faulkner raised approximately $80 million from investors through cold callers who offered turnkey oil and gas working interests in companies he controlled including Breitling Oil and Gas, Crude Energy and Patriot Energy. It said Faulkner grossly inflated his costs to pump up the investments, then misused over $30 million on “international travel, cars, jewelry, gentlemen’s clubs and personal escorts.”
Assistant U.S. Attorney Marcus Busch told the judge the new plea agreement was “in the best interests of the public, the defendant and the government” because he estimated a criminal trial would last three weeks and that appeals would drag on for several years.
The hearing was paused several times so that sections from the sealed indictment could be discussed and for Faulkner to speak privately with defense attorney Kevin B. Ross.