United States v. Wasendorf

On July 9, 2012, local police investigated a suspicious vehicle outside the offices of Peregrine Financial Group, Inc. (Peregrine). The car contained Russell R. Wasendorf, Sr. (defendant), unconscious, with a hose connecting the exhaust pipe to the inside of the vehicle. Police also found a bottle of vodka and sleeping pills in the vehicle, along with a note in which Wasendorf confessed to embezzling millions of dollars from Peregrine’s customer accounts over the course of nearly 20 years. According to the note, the majority of the embezzled funds were used to support Peregrine’s business operations. It was alleged by the federal government that Wasendorf also used embezzled funds for personal uses, including investment in a restaurant and support for a construction company in Romania. Wasendorf concealed the embezzlement in part through the falsification of bank statements and regulatory notices filed with the Commodity Futures Trading Commission (CFTC) and making false reports to the National Futures Association, an industry self-regulatory organization. The full amount of the loss was unknown but estimated by Wasendorf to be in excess of $100 million. Two weeks after his arrest, Wasendorf met with federal law-enforcement agents and cooperated with their investigation. Wasendorf ultimately pleaded guilty to four counts charging him with mail fraud, embezzlement of customer funds under the Commodity Exchange Act, making false statements to the CFTC, and making false statements to a futures association registered under the Commodity Exchange Act.