Arraignment set Friday for founder of failed Cedar Falls brokerage

Former Peregrine Financial Group founder and chief executive officer Russell Wasendorf will be arraigned in federal court Friday on 31 charges related to falsely reporting customer funds by tens of millions of dollars to the Commodity Futures Trading Commission.

Wasendorf, 64, of Cedar Falls, was indicted Monday in U.S. District Court on 31 counts of making and using false statements in a matter within the jurisdiction of the government of the United States. According to the indictment, on 31 occasions between February 2010 and June 2012, Wasendorf caused false year-end financial statements and monthly reports to be submitted to the commission and overstated the value of  customer funds by at least tens of millions of dollars, when he knew their value was far less.

The arraignment is set for 11 a.m. in U.S. District Court in Cedar Rapids.

If convicted on all charges, Wasendorf faces up to 155 years in prison and a $7.7 million fine.

Wasendorf admitted in a suicide note that he stole $200 million from customer funds over a 20-year period, according to court documents.

“I was able to conceal my crime of forgery by being the sole individual with access to the US Bank accounts held by PFG,” Wasendorf wrote in the note to his wife and son that was included in the criminal complaint against him.

Black Hawk County Sheriff's deputies were called to the suicide attempt report at Peregrine in July and found Wasendorf unresponsive in his car, which had a tube hooked to its tailpipe, according to the criminal complaint.

Wasendorf said in the note and signed statement he was in financial trouble and had to choose between going out of business or cheating.

Wasendorf explained in the note how he forged bank statements and went about covering up the scheme.