Operator of Costa Mesa Boiler Room at Center of $11 Million Oil and Gas Investment Scam Sentenced to 10 Years in Federal Prison
SANTA ANA, California – A former Orange County resident who oversaw a company that claimed to be developing oil and gas wells and bilked investors by, among other things, falsely claiming they would see 50 percent annual returns has been sentenced to 10 years in federal prison.
Jerry L. Aubrey, 51, who at the time of the fraud lived in Santa Ana, was sentenced Monday for his in role in the scheme that caused investors in the Costa Mesa-based Progressive Energy Partners (PEP) to suffer over $9 million in losses.
United States District Judge James V. Selna imposed the decade-long sentence and ordered Jerry Aubrey to pay $9,408,184 in restitution to nearly 200 victims.
Jerry Aubrey was sentenced after pleading guilty in January to one count of mail fraud. As prosecutors noted in sentencing papers filed with the court, Jerry Aubrey orchestrated the PEP scheme from October 2005 until April 2010 – and after that he served a five-year prison term in Florida for another fraud scheme that he was involved in prior to PEP.
“This defendant orchestrated a classic investment fraud that promised extravagant returns while investors’ money was simply being used to line the pockets of the scammers,” said United States Attorney Eileen M. Decker. “This is a serial offender who was deserving of a lengthy sentence.”
PEP raised more than $11 million in five unregistered securities offerings for the purported purpose of developing and supporting oil and gas wells. According to court documents, most of the money went to pay the personal expenses of PEP principals, huge commissions to salespersons, and Ponzi-like payments to early investors. As part of the scheme, PEP salespersons used purchased “lead lists” to make cold calls to potential investors, who were told about the alleged profits they could earn from investing in PEP. The victims were not told that, in reality, less than 10 percent of their investments would be used to develop oil and gas wells, according to Jerry Aubrey’s plea agreement.
Along with Jerry Aubrey, two other people were named in a federal grand jury indictment returned in September 2013. They are:
Jerry Aubrey’s brother, Timothy J. Aubrey, 56, of Moreno Valley, a manager and salesperson at PEP, who is scheduled to go on trial before Judge Selna on mail fraud and wire fraud charges on October 25; and
Aaron M. Glasser, 33, a former Mission Viejo resident who now lives in San Jacinto, was a PEP salesman who pleaded guilty in February to one count of mail fraud and is scheduled to be sentenced by Judge Selna on December 19, at which time he will face a statutory maximum sentence of 20 years in federal prison.
In 2012, the Securities and Exchange Commission obtained permanent injunctions against the three defendants in a lawsuit filed in relation to the PEP investment scheme.
The criminal investigation was conducted by the FBI.