Chris Faulkner, the controversial CEO of US fracking company Breitling Energy Corp has been charged with defrauding investors out of more than $80millon to fund a lifestyle of decadence and debauchery.
The US Securities and Exchange Commission has charged the self-styled “Frack Master” and several other senior Breitling managers with grossly over-stating the amount of recoverable oil and gas the company had access to while understating the cost of drilling and completing the necessary fracking wells. According to the SEC:
“Faulkner and his co-defendants duped hundreds of people out of millions of dollars by intentionally and repeatedly lying about several aspects of the investments.
“Faulkner misappropriated at least $30 million of investor funds for personal expenses, including lavish meals and entertainment, international travel, cars, jewelry, gentlemen’s clubs, and personal escorts.”
While this case is at the extreme end of the dubious reporting during the fracking boom, many other companies have – although not unlawfully – also overstated reserves and understated costs to their investors. This is the main reason for the huge discrepancy between the 8 years of gas and 3 years of oil reported by fracking companies to the SEC, and the Saudi American century of oil and gas so often trumpeted by politicians and the US media. It, perhaps, gives a flavour of what we can expect in the UK if fracking ever goes ahead.