Wasendorf is expected to appear before a judge on Friday.
Another mighty one has fallen.
Russell Wasendorf Sr, chief executive of the bankrupt brokerage firm Peregrine Financial Group (PFG), was recently indicted on 31 counts by a federal grand jury for his ethically impaired actions, including lying to regulators.
For decades Wasendorf had been embezzling from the company. He siphoned more than $200 million from his clients by submitting false bank statements to the Commodity Futures Trading Commission (CFTC) and violating customer fund segregation laws.
He doctored financial reports, which misled the CFTC and another regulatory division, the National Futures Association, to believe his futures brokerage firm was reaping in twice the amount of assets it owned.
If convicted on all counts, the fraudster faces up to 155 years in prison and a maximum penalty of $7.75 million for the heinous act of financial fraud.
‘On 31 occasions between about February 2010 and June 2012, Wasendorf caused false reports to be submitted to the CFTC,’ says Stephanie Rose, US prosecutor in Cedar Rapids, Iowa, in a statement that was obtained by Bloomberg.
On July 10, the lies came to an end when the CFTC filed a complaint against Wasendorf and his company to freeze its assets. Later that day, the firm filed for bankruptcy – a move similar to last year’s MF Global debacle.
Prior to his arrest, the fallen financial titan tried to commit suicide and left behind a note to his son, Russell Wasendorf Jr, in which he confessed to stealing from clients for nearly 20 years.
