By Ann Saphir
CHICAGO Aug 6 The hunt for the assets of
Peregrine Financial Group CEO Russell Wasendorf Sr. has yielded
a backyard pool, 2,000 bottles of wine, pickup trucks and some
high-end photography equipment.
But a receiver appointed for Wasendorf's assets in the
firm's bankruptcy says that so far there is little to suggest
that the CEO, who in July confessed to stealing more than $100
million from the futures broker’s customers over nearly 20
years, blew the money on high-priced cars or other indulgences
whose sale could quickly generate money for bilked clients. He
did own a private jet but that appears to be heavily mortgaged.
Wasendorf's relatively modest stash of possessions stands in
contrast to the flashy toys with which other financial swindlers
of recent years have surrounded themselves, and suggests that
recouping money for Peregrine's former clients will not be easy.
Wasendorf's Cedar Falls, Iowa home has a backyard pool with
a retractable glass roof, a tree house, and grounds spacious
enough to erect a tent for the firm's annual picnic, Michael
Eidelman, the receiver, told Reuters as he headed back to
Chicago from Iowa late on Friday.
But inside, the house was comfortable, not ostentatious,
Eidelman said. There were couches, electronic equipment, family
photos and, in the basement, a large amount of home-canning
"At this point we are not talking about Ferraris or
Lamborghinis," said Eidelman, whose court-appointed job is
tracking down and selling Wasendorf's assets at the highest
price. "We do expect and we hope that we are going to find more
assets as the investigation goes on."
PROBE AT EARLY STAGE
Peregrine's bankruptcy trustee has previously said he has
found less than $25 million in cash and liquid assets. Eidelman
did not say what, if any, cash he has located in Wasendorf's own
accounts, and a court filing last week listing Wasendorf's known
assets does not mention any. The investigation, the filing said,
is in its infancy.
Wasendorf's lawyer did not respond to requests for comment.
Peregrine, one of the largest independent U.S. futures
brokerages, filed for bankruptcy protection in Chicago on July
10, a day after Wasendorf attempted suicide just outside his
company's Cedar Falls headquarters.
Wasendorf left a note confessing to years of fraud and said
he spent "most" of the embezzled funds on keeping his
money-losing brokerage in business.
The CEO, who is 64, was arrested on July 13 for lying to
regulators, and is being held at Linn County Correctional Center
in Iowa. A grand jury has subpoenaed his son Russell Wasendorf
Jr., who is Peregrine’s president, as part of its investigation.
No hearing date is set.
Wasendorf did build a brand-new, state-of-the-art
$20-million office building and owned a downtown Cedar Falls
restaurant named myVerona.
There have been two or three expressions of interest in the
office building, and a couple in the restaurant, Eidelman said.
Eidelman will not speculate on the value of Wasendorf's
estate, but says he is working to make sure he sells assets at
the highest possible price. This week he will meet with an
auctioneer to discuss possible options.
Many of Wasendorf's assets were likely bought with embezzled
funds, Eidelman has told the bankruptcy court.
Wasendorf also owns a condo, free and clear of debt, on the
55th floor of a 56-story building overlooking Lake Michigan in
downtown Chicago, Eidelman said. But Wasendorf's private jet,
parked in Waterloo, Iowa, appears to be saddled with a
Eidelman and a team of 15 are keeping busy looking at
assets, talking to people about how much they are worth and how
best to sell them, and chasing leads to find as-yet-unidentified
property. Some of Wasendorf's wealth may be tied up in companies
in the United States and abroad, he said. Among Wasendorf's
investments are interests in a real-estate developer in Romania.
"We are three weeks into a case that could last a very long
time," Eidelman said. "When somebody is hiding money, it’s never
(Editing by Martin Howell and Dale Hudson)
Keywords: PEREGRINE ASSETS/POOL FERRARI
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