Iowa Brokerage CEO Russell Wasendorf Sr Indicted For Lying To Regulators About $200M Fraud
Russell R. Wasendorf Sr., the CEO of the collapsed commodity firm Peregrine Financial Group Inc., has been indicted by a federal grand jury for 31 counts of making false statements to regulators.
Bloomberg reports that Stephanie M. Rose, a U.S. prosecutor in Cedar Rapids, Iowa cited the indictment in her statement on Monday, saying:
“On 31 occasions between about February 2010 and June 2012, Wasendorf caused false reports to be submitted to the United States Commodity Futures Trading Commission.”
Rose added that, should Wasendorf, 64, be convicted on all counts, he will face a top prison sentence of 155 years and a maximum fine of $7.75 million. The founder and CEO of Peregrine Financial has been in police custody since he was arrested in July 13.
Wasendorf attempted suicide outside his firm’s Cedar Falls, Iowa headquarters four days before his arrest, the same day that the National Futures Association announced a shortfall of over $200 million in the firm’s customer funds. The company filed for bankruptcy the same day in Chicago.
Reuters reports that many Peregrine Financial customers, like Ronald Riehm, a coin dealer from Johnston, Iowa, who has $51,000 invested in the firm, are incredibly upset over Russell Wasendorf’s scheme to take over $200M away from customers. Riehm stated:
“He should rot in a prison cell, like Bernie Madof. He lived for 18 and a half years a life of luxury on stolen money. I have no sympathy for him whatsoever.”
James Cordier, principal and founder of Liberty Trading Group stated of the case that:
“It just seems as though the people that own these firms feel that they’re playing with monopoly money. This is people’s hard-earned money that they invest. They’re taking their chances in the market, but never in their wildest dreams do they think this could happen. Someone has to stop this.”
Monday’s indictment does not mention Wasendorf’s alleged misuse of customer money, but additional charges can be added later as the grand jury continues to weigh testimony and evidence.
Russell Wassendorf Sr confessed to forging and intercepting financial statements that were mailed between U.S. Bank and the firm’s auditors at the National Futures Association using little more than a post office box, laser printers and Photoshop software. He also stated that most of the stolen money was used to try and keep his brokerage afloat.
Nicholas Iavarone, Wasendorf Jr’s attorney stated that the CEO and founder of Peregrine Financial “testified and answered all questions and continues to cooperate with the FBI.” Russell Wasendorf Sr is currently being held in a county jail while awaiting his next appearance for an arraignment that has not yet been set, according to the Attorney General’s office.