The U.S. Securities and Exchange Commission (SEC) has reached a settlement agreement with Breitling Energy Corp. CEO Chris Faulkner, who was charged two years ago with defrauding investors in an $80 million oil and gas scheme.

The SEC said Faulkner, who called himself the "Frack Master" for his alleged expertise in hydraulic fracturing (fracking), entered into a plea agreement to serve 12 years in federal prison for securities fraud, money laundering and tax evasion.

"Faulkner first proclaimed himself the 'Frack Master' in order to deceive investors about his expertise and steal millions of dollars to fund his lifestyle, and the SEC put an early end to his second effort to defraud investors in a real estate scheme," said SEC’s Shamoil T. Shipchandler, regional office director in Fort Worth, TX. The “serious civil and criminal sanctions serve as a warning to anyone who intends to target retail investors."

Under the agreement, which is subject to court approval, Faulkner was ordered to disgorge $23.8 million and would be permanently enjoined from violating various provisions of federal securities laws and from participating in any unregistered securities transactions. He also would be barred from serving as an officer or director of any SEC-reporting company and from participating in any offering of a penny stock.

According to the SEC's complaint from June 2016, Faulkner deceived investors "by disseminating false and misleading offering materials, misappropriating millions of dollars of investor funds, and manipulating [Breitling Energy] stock." The SEC said Faulkner began the scheme in 2011 through Breitling Oil and Gas Corp. (BOG), a privately held company that offered and sold turnkey oil and gas working interests. At the time, Faulkner ran most of BOG's operations.

"As part of these offerings, Faulkner lied to investors about his experience, the drilling-cost estimates for the prospects, and the use of their invested funds," the SEC said, adding that the scheme evolved to include BOG's successor, Breitling Energy, and affiliates Crude Energy LLC and Patriot Energy Inc.

Regulators originally filed charges against BOG, Crude Energy and Patriot Energy, as well as seven individuals -- Jeremy Wagers, Rick Hoover, Parker Hallam, Joseph Simo, Michael Miller, Beth Handkins and Gilbert Steedley. The SEC said it had reached settlements with a majority of the individuals and entities charged in the misconduct.