Peregrine CEO arrested for alleged fraud

Russell Wasendorf of collapsed futures firm charged with making false statements. Criminal complaint cites a suicide note.


The head of collapsed brokerage firm Peregrine Financial Group Inc. admitted to defrauding clients out of more than $100 million over nearly 20 years by personally doctoring bank statements and duping auditors with the help of a post-office box, federal prosecutors said Friday.


The dramatic admission came in a signed statement by Peregrine founder and Chairman Russell Wasendorf Sr., which Iowa police found Monday morning in the car in which he had attempted suicide, according to a criminal complaint unsealed Friday by federal prosecutors in Iowa. The 64-year-old executive was arrested Friday and charged with lying to regulators.

Peregrine Financial Group Inc.'s founder said he spent most of the money allegedly embezzled from customers to cushion his trading firm's capital, fund a new corporate headquarters—and even to pay regulatory fines and fees, according to previously undisclosed parts of letters left when he attempted suicide.


"Most of the misappropriated funds went to maintain the increasing levels of Regulatory Capital to keep [Peregrine] in business and to pay business [losses]," said the signed statement. It said the funds also were used to build Peregrine's $18 million headquarters in Cedar Falls, Iowa, and to "pay Fines and Fees charged by the regulators."


Mr. Wasendorf and his fiancée, Nancy Paladino, had sent invitations in late June to a planned wedding in Cedar Falls scheduled for Aug. 4. But the pair secretly wed in Las Vegas on June 30, wedding records show.

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Here is the suicide note that a person familiar with the situation said was left by Peregrine Chief Executive Russell Wasendorf Sr. to his son:

To My Wonderful Son, Russ,

By the time you read this I will have taken my life. I beg for your forgiveness. I have written my final confession that will be discovered with my body. I know you will be shocked to discover my crimes. It all started about 20 years ago. I never wanted you to know the kind of guy I really was.

I know you’ll start second guessing yourself, thinking back on some of the subtle signals that I may be up to something. Your mistake was that you trusted your Father, nothing more.

Another thing you do not know is that Nancy and I are married. We recently got married in Las Vegas. That makes her the heir to the majority of my estate. She will obviously need your help. She will be totally surprised by my demise and certainly will not expect to be saddled with the responsibilities.

It is my dying wish that you help her.

I love you deeply.
(signed) Dad