The Securities and Exchange Commission today filed charges against the alleged leader of an $11 million Ponzi scheme who used stolen investor money to support a lavish lifestyle that included a rented luxury home, limousine rides to Los Angeles Lakers basketball games and exotic vacations.

The SEC alleges that Jerry Aubrey, of North Tustin, Calif., used his now-defunct company, Progressive Energy Partners LLC (PEP) in Costa Mesa, Calif., to recruit investors through cold calls and high-pressure sales tactics.

PEP never engaged in any profitable business operations, according to the SEC. Instead, from about 2005 to April 2010, Aubrey paid existing investors with money raised from new investors.

The SEC also charged Aubrey's brother, Tim Aubrey, of Moreno Valley, Calif., and PEP salesmen Brian S. Cherry, of Newport Beach, and Aaron M. Glasser, of Costa Mesa, in its complaint filed today in U.S. District Court in Santa Ana, Orange County, Calif.

PEP salespeople falsely claimed that investors' money would be used to develop and support oil and gas wells in West Virginia, according to the SEC. Investors were falsely told they could expect annual returns of greater than 50 percent.

The SEC also alleges the Aubrey brothers and Cherry and Glasser failed to inform investors that up to 35 percent of their money would be used to pay sales commissions. Jerry Aubrey paid more than $2.2 million in commissions to PEP salespeople. Glasser received nearly $750,000 and Cherry received more than $300,000.

The Aubrey brothers diverted more than $3.2 million of investor funds for their personal use, including rent for the Aubrey family house, which was equipped with giant fish aquariums with miniature sharks, a hot tub, poo, and tennis court; box seats at Los Angeles Lakers basketball games and limousine rides to and from the games; and vacations to Hawaii, Las Vegas, and Palm Springs, according to the SEC.

"Jerry Aubrey used his company to run a Ponzi scheme and line his pockets at the expense of investors," said Rosalind Tyson, director of the SEC's Los Angeles Regional Office.

The SEC's complaint also charges the Aubrey brothers, Cherry and Glasser with violating the anti-fraud, securities registration and broker-dealer registration provisions of U.S. securities laws.

The SEC is seeking permanent injunctions, disgorgement of allegedly ill-gotten gains with prejudgment interest and financial penalties.

Jerry Aubrey is currently serving a five-year sentence in Florida state prison for selling securities in a fake cruise ship securities fraud he perpetrated in Florida, according to the SEC.

-Jim McConville