Wasendorf left a copy of that statement for his son in the company office before trying to kill himself.
Starting with the Firstar Bank, which became U.S. Bank, and the Harris Bank, he began forging the company’s bank statements, “the very core of PFG,” the futures brokerage, he said. He also made forgeries of official letters and correspondence from the bank, along with trade confirmation statements. He used Photo Shop, Excel, scanners, laser and inkjet printers to produce “convincing forgeries” of almost every bank document.
After closing the Harris Bank account, he “only had to falsify” one set of statements, he said, according to the document the FBI identified as his confession.
The key to his 20-year fraud was maintaining sole access to the company’s accounts at U.S. Bank, he said. The statements were always delivered to him directly when they arrived by mail; within a few hours he had made counterfeit statements and gave the forgeries to his accounting department.
“No one else ever saw an actual U.S. Bank statement,” he wrote in the confession.
He was the only one with online access to PFG’s account, and instructed the bank’s representatives to “interface” only with him. He would establish such “rules and procedures as each new situation arose,” he said.
Forged statements and account confirmation forms contain “purported” signatures of authorized U.S. Bank representatives that were sent to regulators, according to the affidavit. A post office box, which he opened in 2006 after presenting his driver’s license and a car registration renewal form, has U.S. Bank Fund LLC as a recipient of mail. That helped him trick regulators into thinking they were dealing with U.S. Bancorp, a person with direct knowledge of the inquiry said.
Wasendorf’s son, referred to in the affidavit as Russ Jr., first examined a forged Peregrine bank statement on July 9, obtaining it from Peregrine’s accounting department on the day of his father’s suicide attempt, he told law enforcement officers.
Financial statements based on a forged bank statement showing Peregrine’s customer accounts at U.S. Bank with a balance of $221.8 million as of Dec. 31 was sent to regulators including the CFTC, according to the affidavit. The account actually held only $6.3 million, according to the FBI.
The criminal case is U.S. v. Wasendorf, 12-mj-131, U.S. District Court for the Northern District of Iowa (Cedar Rapids). The bankruptcy case is Peregrine Financial Group Inc., 12-27488, U.S. Bankruptcy Court, Northern District of Illinois (Chicago). The regulatory case is U.S. Commodity Futures Trading Commission v. Peregrine Financial Group Inc., 12-cv-5383, U.S. District Court, Northern District of Illinois (Chicago).
--With assistance from Matt Leising in New York. Editors: Mary Romano, Peter Blumberg