Alleged Peregrine Investment Scheme Good Example of Copycat Fraud
If he did the things he is accused of doing, Russell Wasendorf, Sr. is a perfect example of a copycat fraudster. Based on the allegations against him, Wasendorf built his alleged investment scheme straight out of the playbooks of other infamous fraudsters. No wonder “he said it was ‘relatively simple’ to fool regulators.” At least, that’s the argument writer Joelle Scott made in a July 24 post on PEHub.com.
Earlier this month, Wasendorf and his company, Peregrine Financial Group, Inc., were charged with fraud, misappropriation of customer funds, violation of customer fund segregation laws, and making false statements by the U.S. Commodity Futures Trading Commission. In particular, the CFTC’s Complaint alleged that Wasendorft, Sr. and Peregrine falsely represented in July 2012 that the firm held $220 million worth of customer funds – 43 times more than the $5.1 million it actually held. Several days later, after an attempted suicide, Wasendorf was arrested and charged by federal authorities.
According to the FBI’s investigation and Wasendorf’s suicide note, he – like convicted Ponzi schemer Bernie Madoff – stole millions from customers over multiple decades and used the money to fuel his lavish lifestyle. Also like Madoff, Wasendorf allegedly used his position as a member of a regulatory advisory board (the National Futures Association advisory board) to help elevate him and his firm above regulatory scrutiny. And, like Madoff, Wasendorf claims to have acted alone.
Bernie Madoff isn’t the only infamous fraudster Wasendorf’s alleged scheme brings to mind, however. To learn whom else the alleged con artist may have aped, read Scott’s full post here.