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The U.S. Securities and Exchange Commission filed fraud charges and an emergency asset freeze to halt a California-based oil and gas investment scheme tied to Quantum Energy LLC and Quaneco LLC.

According to a complaint filed by the SEC in a Los Angles federal court, Harrison Schumacher and his two companies, Quantum Energy and Quaneco, allegedly raised $12.3 million from more than 300 investors nationwide in connection with five offerings that were not registered with the SEC.

For each of the offerings, Schumacher and Quantum allegedly diverted investor funds that were earmarked for exploration and development costs and used the funds to pay for undisclosed corporate business overhead expenses and Schumacher’s compensation.

Although the funds were supposed to be segregated in separate trust and escrow accounts, Schumacher and his companies commingled the funds in Quantum’s operating accounts.

The commingle funds were then used to to pay for Schumacher’s “lavish personal expenses including a Porsche,” the SEC said.

The defendants also allegedly concealed the diversion of investor funds through phony turnkey drilling contracts where Quantum claimed to pay Quaneco to drill wells.

Schumacher and his companies have recently been soliciting funds for a new Utah-based oil-and-gas investment program and planning to raise another $2 million, the SEC said.

The complaint further alleges that Schumacher acted as an unregistered broker in violation of Section 15(a) of the Exchange Act.

The complaint requests permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, the establishment of a fair fund for the benefit of harmed investors, the appointment of a receiver, a penny stock bar, a permanent injunction against raising funds from investors, an order prohibiting defendants from encumbering corporate assets, and penalties.