Russell R. Wasendorf Sr., chief executive officer of the collapsed commodity firm Peregrine Financial Group Inc., was indicted by a federal grand jury on 31 counts of making false statements to regulators.
“On 31 occasions between about February 2010 and June 2012, Wasendorf caused false reports to be submitted to the United States Commodity Futures Trading Commission,” Stephanie M. Rose, a U.S. prosecutor in Cedar Rapids, Iowa, said in a statement, citing an indictment filed yesterday.
Wasendorf, 64, faces a top sentence of 155 years in prison and a maximum fine of $7.75 million if convicted on all counts, Rose said.
The founder and chairman of Peregrine Financial has been in U.S. custody since his arrest on July 13. He is scheduled to be arraigned on Aug. 17, according to an entry today in the court’s electronic docket.
Four days before his arrest, Wasendorf attempted suicide outside his firm’s Cedar Falls, Iowa, headquarters, the same day the National Futures Association announced a shortfall of more than $200 million in customer funds that the firm had reported on deposit at U.S. Bank just days before.
The CFTC on July 10 sued the firm and Wasendorf, claiming they had misappropriated the missing money. Peregrine filed for bankruptcy in Chicago, where it also had offices, later that same day.
In a statement found with Wasendorf when he tried to kill himself, the CEO confessed to embezzling from Peregrine for almost two decades, according to an FBI affidavit filed with the court upon his arrest.
A Federal Bureau of Investigation special agent, William Langdon, also wrote that Wasendorf made a hospital bed admission to stealing at least $100 million from the firm.
Federal Public Defender Jane Kelly of Cedar Rapids is representing Wasendorf, whose assets have been frozen by a federal court order. She didn’t reply yesterday to an e-mailed request for comment.
The criminal case is U.S. v. Wasendorf, 12-cr-2012, U.S. District Court, Northern District of Iowa (Waterloo).
To contact the reporter on this story: Andrew Harris in Chicago at firstname.lastname@example.org.