Peregrine Financial Founder Arrested, Admits 20-year Fraud, FBI Says
The sole owner of Peregrine Financial Group admitted to using a combination of faked bank statements and “blunt authority” to hide a nearly two-decade-long fraud at the failed futures broker, authorities said.
Russell Wasendorf Sr was arrested Friday on criminal charges of making and using false statements to trick regulators into believing the broker held customer funds in excess of $200m when the real balance was less than $10m.
“I have committed fraud,” Mr Wasendorf wrote in a signed statement found next to a suicide note and his unresponsive body in a car outside the company’s Iowa headquarters Monday, the Federal Bureau of Investigation said in an affidavit. “For this I feel constant and intense guilt.”
The shortfall at Peregrine, which regulators uncovered after Mr Wasendorf’s suicide attempt, has raised fresh doubts about the security of customer deposits in a futures industry still damaged by the massive hole in customer accounts that followed MF Global’s 2011 collapse.
Mr Wasendorf’s statement, excerpted in the affidavit, lays out a detailed summary of a how a hard-charging and increasingly powerful entrepreneur spent years deceiving not only regulators but his own staff to embezzle millions from customers.