Southlake Oil and Gas Flim-Flam Man Has a Really, Really Bad Month

Categories: Biz

jasonhalek.jpg
Twitter user @JHalek73
There was a time for Jason Halek when life was all luxury suites at Cowboys Stadium and showroom-fresh Hummers. Investors were pumping millions into his oil-and-gas start-up. Then everything, as it so often does when your business model revolves around misleading investors, sort of fell apart. The last few years have been bad for Halek.

This month, however, has been positively brutal. The 5th U.S. Circuit Court of Appeals ruled that he does in fact owe some $26 million for the disgorgement of ill-gotten gains (with interest). Meanwhile, North Dakota regulators are getting ready to slap his Southlake company with one of the biggest fines against an oil and gas producer in the state's history, for putting groundwater in great jeopardy.

It might be time for him to get out of fossil fuels.

The story starts in 2010, when the U.S. Securities and Exchange Commission filed suit against Halek for raising $22 million from investors he cold-called with some pie-in-the-sky projections for the rate of return on their money. That investment was a collection of drilled and yet-to-be-drilled wildcat wells that were speculative at best. Wells previously drilled in the area didn't produce the kind of volumes that would earn investors remotely the kind of double or triple return Halek promised. Nor did any of the wells they'd already sunk. They were, as it turned out, spun from whole cloth by a couple of guys with no experience in geology or the oil and gas business.

According to the complaint, the company and its affiliates regularly inflated costs, padding their own profits. They spun tales of lucrative gas wells, only the gas wells weren't anywhere near a pipeline.

A federal judge ordered Halek and the SEC to enter into mediation to settle what he owed in disgorgement and civil penalties. After a whole bunch of not settling, the district court entered a finding of fact, accusing Halek of fraudulently enriching himself to the tune of more than $21 million, plus interest and $50,000 in civil penalties. Halek appealed and, last week, he lost. He's on the hook for $26 million.

But, apparently, as all of this transpired, he was getting into a whole other different kind of trouble up in North Dakota's booming Bakken Shale. In 2011, one of his frack water pits overflowed into drainage because of snow-melt, according to EnergyWire. Halek paid a small fine and carried on. The well that pit served wasn't good for much more than producing water, so Halek applied to have it converted to a waste-water injection well.

According to state officials, he didn't wait for the green light and proceeded with lucrative disposal operations before installing the mandated three layers of steel casing to protect surrounding groundwater. Halek, for his part, claims the well was properly cased, EnergyWire reports.

Said a North Dakota regulators: "The violations admitted by Halek are among the most egregious violations ever pursued by the commission."

The state hasn't found evidence of contamination yet, but said that the risk is high. If the waste water does find its way into aquifers, they fear clean-up might be impossible.

Halek, ever the wily one, says he'd actually transferred control over that well to someone else by that point. The state says he can't simply transfer wells at his convenience, which would kind of defeat the purpose of regulation. The North Dakota Bureau of Criminal Investigations has filed charges against the former associate Halek transferred control of the well to. And the State Department of Mineral Resources wants Halek to pay a $1.5 million fine.

Halek, as we mentioned earlier, is having a really, really bad month.

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29 comments
TexasLg
TexasLg

I worked for him,  he may have been a jerk sometimes, but he always paid me what I earned and on time. That's all I have to say.

ra700
ra700

I ran across this article by accident, looking for cbo address or contacts. After reading it I am going to have to defend Jason. I worked for him through a contract company in corsicana and brownwood, never heard a bad word from him. As a matter of fact he was a really nice guy. I dont know about his business dealings but I know he paid us what he owed us. Sorry Jason

Smiley0983
Smiley0983

Typical Jason Halek, always wanting to sue someone for speaking the truth. They should get his old employees that quit after a few months of putting up with this BULLY. I have heard many things about the way he treats people from the guys he had in the oil field. They said that he even had hired pretty girls to drive him around while he talked down to them.  This man is better off just left alone...

hja9872000
hja9872000

Because a real man would say there name. It's evil people that spread lies about me because they were trying to stop all the people I was helping. I am working on changing the world for the better

hja9872000
hja9872000

I always help many people!!! These people make up lies because they are evil!!! Just want them to give us there real names!

hja9872000
hja9872000

I am not a bully I always help many people. I am going to stand up for my self so I can help people again a lot

hja9872000
hja9872000

This is all lies if you will give me your real name I will be happy to include you in the lawsuit this is Jason Halek.

hja9872000
hja9872000

The story is all lies please give me your true name and phone number so I can name you in the lawsuit

hja9872000
hja9872000

This story is full of lies. I would never cheat anyone in any way. Everyone who knows me know I am here to help and make the work a better place. I believe karma will really get the people government officials, lawyers,and judges who perpetrated these lies they have cursed there families

Obummer
Obummer

Yo da White House haz uh new slogan 'boutBenghazi: Hopez an' changez da subject.

nammer
nammer

isn't capitalism great!!

MushMouth1
MushMouth1

Sounds like he now has the proper credentials to get a free,tiny percentage of a MLB team so he can pass himself off as a team "owner" then become governor and then parley that into two terms as POTUS

director21
director21

Jason Halek may be today's flavor of an oil and gas flim-flam man who got caught, but there are litereally thousands of others just like him that do this stuff all the time and never get caught because they are protected by state agencies like TCEQ, RRC of Texas, COGCC (Colorado), PDEQ (Pennsylvania) and similar agencies in other oil and gas producing states who take money to turn a blind eye to the damage and destruction left behind in the wake of exploration and production.

But, in the end, I have zero sympathy for any investor who got scammed. They deserve it because it is obvious that greed overrode good business practices. They should have investigated and determined that the offers were legitimate before signing the checks. Caveat emptor, and all of that.

ThePosterFormerlyKnownasPaul
ThePosterFormerlyKnownasPaul topcommenter

There are two ways to make money in oil and gas.  One is to drill into the ground and produce commercially viable deposits of oil and gas.  The other is to drill into people's wallets and suck out the money.


As one promoter said many years ago, selling 200% of a well isn't necessarily bad.  Its bad when the well comes in and everyone wants to get paid.  This was Dad Joiner's problem.

David McCollum
David McCollum

I''ll Loan him my Pistol so he can Blow his Brains out!

hello
hello

@ra700  You are lucky you got paid.  There is a slew of other contractors who didn't.  As the article shows halek took money from investors and never drilled a good well, I hope he stays out of the oil business.  Talked to a few people who made the mistake and lost it all banking on the projections made by halek.  Some that was all they had, greed gets in front of common sense too many times.  There were red flags galore that were ignored.  

kk4u
kk4u

@hja9872000  If you want to help people, why don't you give me my money back that you took for a well that produced NOTHING?

karma
karma

@hja9872000  The story is not full of lies and halek has cheated many people out of money.  

bvckvs
bvckvs topcommenter

@David McCollum

And then you'll trust him to do it?
H
aven't fools loaned him enough already? 

hja9872000
hja9872000

Not at all just sick of people making up lies about me and won't even give me there real name.

hja9872000
hja9872000

The story is a total like please give me you name and phone number I am Jason Halek. I would never cheat anyone

bingo
bingo

@hja9872000  Why would they give you their name?  All you would do is yell at them and sick your lawyer on them to squash their fundamental right to free speech.  Noone is threatening you here, just agreeing with the facts that are stated in the numerous articles.  

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