Lawsuit: CEO Used $1M in Funds on Escorts, Strip Clubs

A Texas energy company CEO dubbed the "frack master" is charged with defrauding investors of about $80 million, including misappropriating at least $30 million for personal expenses, including private jets and gentlemen's clubs, to "maintain a lifestyle of decadence and debauchery," according to a lawsuit filed Friday by federal regulators. In its lawsuit, the SEC accuses Chris Faulkner, CEO of Breitling Energy Corp., of orchestrating a scheme in which he and others misled investors about oil-and-gas working interests sold by Breitling Energy and three affiliated companies, the AP reports. The lawsuit also alleges Faulkner manipulated Breitling Energy's stock price after it began falling in late 2014.

The SEC said Faulkner used investors' funds to pay for extravagant charges on his credit cards, including more than $950,000 to his personal concierge company for private entertainment and more than $220,000 for private jet carriers. Faulkner also used one company card, which he dubbed his "whore card," to charge more than $1 million for personal travel, expenses for personal escorts, and gentlemen's clubs, including spending nearly $40,000 at one club over four days in July 2014, the SEC said in its lawsuit. Faulkner's attorney said the SEC's allegations "are not accurate." He alleged Breitling Energy's competitors are behind the lawsuit, claiming they are envious of Faulkner's high profile and many appearances as an expert in fracking on various cable news networks. (More fraud stories.)