PFG Founder Admits: I Forged Bank Statements for 20 Years

CEDAR FALLS, Iowa — Russell Wasendorf, the founder and CEO of failed trader Peregrine Financial Group, has arrested, CNBC has learned.

He has been charged making false statements the Commodity Futures Trading Commission relating the value of customer segregated funds at PFG beginning back 2010 and continuing July 2012.

"I have fraud," Wasendorf said in a signed statement, to the criminal compliant. Wasendorf also said he forged bank statements 20 years.

Wasendorf said in his statement he turned fraud because he had no access needed capital.

Wasendorf is expected to in federal court in Cedar Rapids, Iowa at 4pm Central .

PFG filed bankruptcy on Tuesday, and regulators say some $200 million customer funds are unaccounted .

One day earlier, Wasendorf — a 40-year futures industry veteran — attempted suicide his car outside PFG's Cedar Falls, Iowa headquarters.

Authorities will discuss Wasendorf Sr.'s condition, but local newspaper, quoting unidentified sources, reported is alert and responsive at an Iowa hospital, and possibly able to some light on the bizarre events up to the firm's collapse.

On June 5, employees received an invitation Wasendorf's wedding to his fiancee Nancy Palladino, planned Aug. 4, according to another email obtained CNBC.

But public records in Clark County, Nevada show Wasendorf and Palladino married in Las Vegas three weeks later, June 30. Three days after the wedding, Wasendorf signed power-of-attorney to his son, Russell Wasendorf, Jr.

Three days later, on July 6, the younger Wasendorf sent the email employees saying the firm was now poised to even.

PFG had been scrutiny for months.

In February, the industry's self-regulatory organization — the National Futures Association — a civil complaint against the firm alleging violations involving customer funds.

PFG's -house attorney has also not responded to CNBC's requests comment.


Adapted and abridged from: CNBC, July 13, 2012.