The founder and CEO of Peregrine Financial Group was indicted for allegedly lying to authorities, one month after his failed suicide attempt and confession to defrauding the brokerage’s customers for years.
Based on the indictment that was filed, Russell Wasendorf Sr. exaggerated the value of its customer money by tens of millions of dollars in its statements to the Commodity Futures Trading Commission.
The United States Attorney’s office said the indictment includes a maximum of 155 years of imprisonment and a fine of more than $7 million.
Peregrine filed for Chapter 7 bankruptcy in July, a day after its founder attempted to take his own life and left a suicide note recounting how he had taken money from Peregrine customers for almost two decades.
The failure of the futures brokerage has waned confidence in the industry, happening several months after the collapse of MF Global, which is still under investigation for because of a $1.6 billion shortfall in customer funds.
According to the CFTC, Wasendorf Sr misused over $200 million of the customers’ money.
The alleged misappropriation is not mentioned in the indictment, but only states that the customer fund’s value from February 2010 to June 2012 was misrepresented.
When a person is indicted, it means that a grand jury has officially charged him. Other charges can be included afterward while the grand jury is still evaluating evidence and testimony.
In his suicide note, Wasendorf Sr. confessed that he used Photoshop software, laser printers, and P.O. box in forging and intercepting financial reports that were sent to U.S. Bank. He also sent the same financial statements to the National Futures Association.
Wasendorf Sr. also admitted that most of the money he had stolen were used to keep Peregrine afloat.
He has been confined to jail since his arrest last month.
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