Most of Peregrine Financial Group's missing money is likely gone.
CEO Russell Wasendorf Sr. allegedly spent a significant chunk of the embezzled $200 million funding the company’s new headquarters and paying regulatory fees and fines, the Wall Street Journal reports. In a previously undisclosed portion of his suicide note and signed statement, Wasendorf Sr. blames the 20-year fraud on “mean spirited” regulators. He added that misleading the regulators was “relatively simple.”
Last week, Wasendorf Sr. found in his car with a tube connecting the tailpipe to the inside of the car in an attempted suicide. Regulators announced that more than $200 million was missing from Peregrine’s customer accounts. Wasendorf Sr. was arrested soon after and charged with lying to regulators.
In the parts of the suicide note disclosed last week, Wasendorf Sr. took responsibility for the fraud, saying that he had the company’s bank statements delivered directly to him and the used “a combination of Photo Shop, Excel, scanners and both laser and ink jet printers" to make forgeries of the statements and deliver them to the company’s accountants. The scam continued for 20 years, according to his note.
Wasendorf Sr. had another suicide note addressed specifically to his son, according to the WSJ, in which he told him about his Las Vegas wedding weeks before PFG's collapse and told him "your mistake was that you trusted your father, nothing more."
The company filed for bankruptcy last week and was reminiscent of MF Global’s fall last year. PFGBest’s missing money was exposed in part because of rules created after MF Global’s collapse, according to a separate WSJ report.
Still, the National Futures Association, one of the watchdogs responsible for regulating PFGBest missed the fraud for 20 years in large part because they use inexperienced auditors, critics claim. That fact is even more damning given that many of PFGBest’s current and former staffers weren’t that surprised when the scandal came to light.
“I was waiting for something like that to happen,” Leon Bressert, a former PFGBest employee, told The Huffington Post this week.