IOWA CITY, Iowa (AP) — Federal prosecutors say the chief executive officer of an Iowa-based brokerage firm that is missing more than $200 million in customer money has been charged with lying to regulators.
Peregrine Financial Group CEO Russell Wasendorf Sr. admitted responsibility for the fraud that led to the loss in customer funds at his firm, in a suicide note that his son found in his car Monday. In the note, Wasendorf Sr. says that the fraud went undetected for 20 years (h/t Zero Hedge).
"Through a scheme of using false bank statements, I have been able to embezzle millions of dollars from customer accounts," the note reads.
Wasendorf Sr. went on to write that he was the only one in the entire firm to ever see its bank statements. The statements would be delivered directly to him, Wasendorf wrote, and then he would make forgeries "using a combination of Photo Shop, Excel, scanners and both laser and ink jet printers" and deliver those to the accounting department before anyone else could see them.
A complaint filed Friday in U.S. District Court in Cedar Rapids says 64-year-old Wasendorf, Sr., made false statements to the U.S. Commodity Futures Trading Commission about the value of customer funds held by his company, Peregrine Financial Group, Inc.
A press release from the U.S. Attorney's Office says Wasendorf was arrested Friday by FBI agents and is due in federal court in Cedar Rapids for an initial appearance.
Wasendorf had been hospitalized at University of Iowa Hospitals and Clinics after attempting suicide outside the company's headquarters on Monday. Court records do not list an attorney for Wasendorf.
Read Wasendorf Sr.'s full suicide note below:
Russell Wasendorf Sr., PFGBest CEO
After discovering that his brokerage firm <a href="http://www.huffingtonpost.com/2012/07/09/pfgbest-brokerage-customer-funds-suicide-wasendorf_n_1660673.html?utm_hp_ref=business" target="_hplink">PFGBest had lost over $200 million worth of customer funds</a>, CEO Russell Wasendorf Sr. attempted suicide outside the firm's Iowa headquarters.
Eli M. Black, Former Chairman of United Brands Co.
Eli Black committed suicide after it was discovered that he offered a $1.25 million bribe to a Honduran official in 1975, <a href="http://www.time.com/time/magazine/article/0,9171,913028,00.html" target="_hplink"><em>TIME Magazine</em> reported</a> at the time.
David B. Kellermann, Former CFO of Freddie Mac
Following the 2008 Financial Collapse, co-workers reported that Mr. Kellermann worked himself to exhaustion. <a href="http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CE4QFjAA&url=http%3A%2F%2Fwww.huffingtonpost.com%2F2009%2F04%2F22%2Ffreddie-mac-suicide-offic_n_189911.html&ei=Lg7uT8SqEKfH6gHC4ZCcCg&usg=AFQjCNFZmVqCRjBrfBF764Tb-ekbtaTSlw" target="_hplink">He killed himself in 2009.</a>
J. Clifford Baxter, Former Vice Chairman of Enron
Just weeks after Enron filed for bankruptcy, J. Clifford Baxter committed suicide in January 2002, <a href="http://articles.cnn.com/2002-01-25/us/enron.suicide_1_cliff-baxter-philip-hilder-enron-north-america?_s=PM:US" target="_hplink">CNN reported at the time</a>.
Rene-Thierry Magon de la Villehuchet, Former Madoff Investor
Rene-Thierry Magon de la Villehuchet invested $1.4 billion into Bernie Madoff's investment fund. When it was discovered that the fund was a ponzi scheme and he had lost everything, he killed himself, the <a href="http://news.bbc.co.uk/2/hi/business/7798533.stm" target="_hplink">BBC reported at the time.</a>