CEO of Brokerage Firm Admits in Suicide Note: “I Embezzled Millions of Dollars”
The CEO of an Iowa-based brokerage firm wrote in a suicide note about his elaborate fraud scheme, in which, for 20 years, he embezzled $200 million from customers. Russell Wasendorf Sr., chief executive of Peregrine Financial Group Inc., had been hospitalized last Monday after attempting suicide by running a tube from his tailpipe into his car.
The note was found in his car and stated:
I have committed fraud. For this I feel constant and intense guilt. I am very remorseful that my greatest transgressions have been to my fellow man. Through a scheme of using false bank statements I have been able to embezzle millions of dollars from customer accounts.
Wasendorf, 64, was arrested on Friday at an Iowa City hospital after being charged with making and using false statements to regulators. He faces decades in prison. His company filed or bankruptcy last Tuesday after an industry regulator charged the firm with misusing customer funds and falsely claiming a bank account used for customers held $220 million, when it only held $6 million.
Wasendorf wrote in the note:
I had no access to additional capital and I was force into a difficult decision: should I go out of business or cheat? I guess my ego was too big to admit failure. So, I cheated. I falsified the very core of the financial documents of PFG.
In his note, Wasendorf states that he has been able to run his scheme by having sole control over U.S. Bank accounts. He wrote that bank statements were delivered directly to him, and within a few hours, he forged the documents and sent them to the accounting department.
He stated that by using a combination of Excel, Photoshop, scanners and various printers, he “was able to make very convincing forgeries of (nearly) every document that came from the bank.”
Wasendorf also confessed to opening a P.O. box in the name of U.S. Bank to intercept reports intended for the bank from regulatory auditors.
I would intercept the form, type in the amount I needed to show, forge a bank officer’s signature and mail it back to the regulator or certified auditor.
Online banking? Not a problem. Wasendorf stated:
When online banking became prevalent, I learned how to falsify online bank statements and the regulators accepted them without question.
A separate suicide note from Wasendorf to his son has also been released. In it he writes:
I know you will be shocked to discover my crimes. It all started about 20 years ago. I never wanted you to know the kind of guy I really was.