* Insurance policies, U.S. and foreign real estate examined
* Jet aircraft may have a mortgage attached - receiver
* Former Peregrine customers have so far received no payouts
* Regulators say Wasendorf bilked customers of over $200 mln
By Ann Saphir
CHICAGO, July 24 Russell Wasendorf Sr., the
jailed founder of Peregrine Financial Group who confessed to
stealing more than $100 million from customers, may not be
telling the whole truth about where the money went, his
court-appointed receiver said on Tuesday.
The brokerage filed for bankruptcy protection in Chicago on
July 10, and Wasendorf was arrested three days later for lying
to regulators. With his assets frozen, the chief executive will
rely on a public defender at his next appearance in criminal
court, scheduled for Friday.
In a signed statement left at the scene of his attempted
suicide on July 9, Wasendorf said he spent "most" of the
embezzled funds on keeping his money-losing brokerage in
business, a "portion" on building a new office building in Cedar
Falls, and some also on paying fines and fees imposed by
But Michael Eidelman, the receiver in the bankruptcy case
charged with tracking down and selling Wasendorf's assets at the
best possible price, believes that at least some of the money is
tied up in property that can be sold to raise money for bilked
"He's made some public statements that the money is no
longer there," Eidelman told Reuters. "I don't take that
statement at face value. We believe the money was used for other
That may be good news for customers of the failed brokerage,
who so far have not gotten back any of the money they had on
deposit at Peregrine to back their trades.
Any assets that Eidelman tracks down and sells will
eventually be used to help repay customers, who regulators
estimate are out more than $200 million.
So far, though, it is "premature" to predict how much it
will all be worth, Eidelman said, adding that he plans to file
papers with the bankruptcy court in coming weeks outlining his
plans for selling the assets to obtain "the highest and best
The sale of some of the property, like the condominium on
the 55th floor of a lakefront high rise in Chicago that
Wasendorf bought in 2003 for $1.2 million, will clearly fetch
The value of other assets, like the jet plane that flew
Wasendorf and his fiancée to a hastily arranged Las Vegas
marriage two weeks before Wasendorf's attempted suicide, is less
The plane, which the receiver said is valued at between $3.5
million and $7 million, may have a $4 million mortgage on it as
well, he said.
Other property includes a home in Cedar Falls and the
corporate headquarters, built for $18 million. Wasendorf also
had at least two cars, the makes and models of which the
receiver declined to disclose.
Also under investigation are properties Wasendorf used to
own, including an apartment on Chicago's Lake Shore Drive, now
occupied by Wasendorf's former chief financial officer, and a
home in Florida that is now owned by other members of the
If properties were "inappropriately transferred," Eidelman
said, they could become the target of a lawsuit to bring them
back to the bankruptcy estate, the receiver said.
So far, he said, there is no evidence of such a situation,
although his investigation is still in its preliminary stage.
The receiver is already talking with potential buyers about
Wasendorf's large wine collection, which was kept at his homes
in Iowa and Chicago as well as at Wasendorf's shuttered
restaurant in downtown Cedar Falls, named MyVerona.
There has also been an "expression of interest" in buying
the restaurant, Eidelman said.
Other assets that have turned up include life insurance
policies and property in Europe. Wasendorf is part-owner of a
firm that invests in Romanian real estate.