Two men indicted in a Costa Mesa-based telemarketing scheme were arrested this week.
Timothy Aubrey, 53, of Moreno Valley, surrendered Tuesday to FBI agents in Riverside, and co-defendant Aaron Glasser, 30, of Mission Viejo, was arrested at an undisclosed location, Laura Eimiller of the FBI said. Aubrey's brother, 51-year-old Jerry Aubrey, 51, was arrested earlier, she said.
An indictment alleging their participation in a telemarketing investment, or boiler room, scheme was unsealed today, Eimiller said.
Jerry Aubrey started and managed Progressive Energy Partners, according to the indictment. Timothy Aubrey was a manager and salesman, and Glasser also was a salesman, according to the indictment.
The company raised more than $11 million from more than 200 investors by offering shares in five unregistered securities, the indictment alleges.
Investors were told their money would be used to develop and support oil and gas wells, but the indictment alleges the money went directly to the Aubrey brothers, paying its sales staff commission up to 30 percent and making Ponzi-style payments to early investors.
Investors were promised annual returns of more than a 50 percent, with nearly half of the money spent on oil and gas wells. The rest would go to other business expenses, the indictment alleges.
About 30 percent of the"investments" were used for the Aubreys' personal expenses, according to the indictment, which said less than 10 percent was spent on oil and gas wells.
The Securities and Exchange Commission won a summary judgment against the three in 2011. In 1998, the SEC charged Jerry Aubrey with selling securities in a fictitious cruise ship.
The three, who are charged with eight counts of mail fraud and two counts of wire fraud, could face up to 200 years in federal prison.
– City News Service.