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Cedar Falls ponzi man Wasendorf gets 50 years in the big house

This news story was published on January 31, 2013.
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CEDAR RAPIDS – Russell R. Wasendorf, Sr., age 64, from Cedar Falls, Iowa, who stole more than $215,000,000 in customer funds from his commodity futures business, was sentenced today to 50 years in federal prison. Wasendorf received the prison term after a September 17, 2012 guilty plea to one count each of:

– mail fraud,
– embezzlement of customer funds by a person registered under the Commodity Exchange Act,
– making false statements to the Commodity Futures Trading Commission, and
– making false statements to a futures association registered under the Commodity Exchange Act.

Wasendorf was the owner and former Chief Executive Officer of the now-bankrupt Peregrine Financial Group, Inc. (PFG), a futures commission merchant headquartered in Cedar Falls, Iowa.

In a plea agreement, Wasendorf admitted that, from about the early 1990s through about July of 2012, he stole millions of dollars from PFG’s customers. Wasendorf admitted he stole the funds, at least in part, by withdrawing money secretly from a customer segregated bank account, and then by omitting the withdrawals from and inflating the balances on forged bank statements purportedly issued by the bank. Wasendorf admitted that the forged bank statements overstated the amount of customer funds in the account by more than $200 million. Wasendorf admitted he prevented regulators from discovering his crimes by submitting false periodic reports, and forged bank account verification forms to the National Futures Association and the Commodity Futures Trading Commission.

Also in the plea agreement, Wasendorf admitted establishing a post office box to intercept paperwork sent by regulators and intended for U.S. Bank. Wasendorf included the post office box number on forged bank statements so that auditors and regulators would think the box belonged to the bank.

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