CEO Of Collapsed Future Brokerage's Suicide Note: 'I Embezzled Millions Of Dollars From Customer Accounts'


Photo: PFGBest

The AP reports Russell Wasendorf Sr., the CEO of collapsed futures brokerage Peregrine Financial Group, has been arrested by the FBI.He’s been charged with making false statements to regulators.

Bloomberg is reporting that prosecutors are saying the fraud began 20 years ago.

Attain Cappital, which has been at the forefront of speaking on behalf of an outraged brokerage community, has a copy of the complaint.

It quotes from the suicide note found in Wasendorf’s car.

“I have been able to embezzle millions of dollars from customer accounts,” the complaint quotes Wasendorf as writing.

“I had no access to additional capital and I was forced into a difficult position: Should I go out of business or cheat?”


“When it became common practice for … regulators to mail balance confirmation forms, I opened a PO box.”

“When online banking became prevalent I learned how to falsify online bank statements and regulators accepted them without question.

“Using a combination of Photo Shop, Excel, scanners, and both laser and in jet printers I was able to make very convincing forgeries of nearing [sic] every document that came from the bank.”

Later that day, according the complaint, Russell Jr. obtained a $220 million US Bank balance from PFG’s accounting department. When he checked the same balance directly at US Bank, he found it was only $6 million.

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, AP says.

Wasendorf had been admitted to an Iowa City hospital in unknown condition July 9 after he was found in his car with a tube hooked to the vehicle’s exhaust pipe.

The complaint says the FBI was already interviewing him that afternoon.

The FBI and CFTC are investigating a $200 million shortfall in PFG’s customer-segregated accounts. The firm has filed for Chapter 7 liquidation.

Here’s a screenshot of the suicide note, from the complaint (which is only being sent out in scanned PDF form):


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