Peregrine trustee demands founder’s ex pay back divorce millions
BY DAVID ROEDER Business Reporteremail@example.com January 28, 2013 4:26PM
Russell Wasendorf Sr. in front of the Peregrine Financial Group Inc. last year in Cedar Falls, Iowa. | Rick Chase~Waterloo Courier
Updated: March 2, 2013 6:16AM
Russell Wasendorf Sr., who has confessed to stealing more than $100 million in customer money from Peregrine Financial Group Inc., used some of it for a divorce settlement, the trustee for the bankrupt brokerage charged in a lawsuit.
The trustee, Ira Bodenstein, demanded that Connie Wasendorf return $2.8 million in payments she received from Peregrine after the divorce became final Dec. 30, 2010. The suit also asks a judge to disallow her claim that Peregrine’s estate owes her another $2.4 million.
An attorney for Connie Wasendorf declined to comment. According to court records, she has homes in Cedar Falls, Iowa, and Orlando, Fla.
Russell Wasendorf founded the Peregrine firm, which was based in Cedar Falls but had a large operation in Chicago. Last July, when regulators were pressing him to verify sums in customer accounts, Wasendorf attempted suicide.
He later pleaded guilty to embezzlement. Prosecutors, who say he stole about $215 million over 20 years, are asking for a prison sentence of up to 50 years. Wasendorf is due to be sentenced Thursday.
Bodenstein’s lawsuit charged that shortly after the divorce decree, Russell Wasendorf illegally withdrew $2.7 million from Peregrine’s customer funds, then sent the same amount to his ex-wife.
It also said that Wasendorf agreed to pay his ex-wife a $20,000-per-month “severance” from Peregrine funds. Bodenstein said $360,000 was paid to her under that agreement until he interceded.
Most of the money that Connie Wasendorf asserts Peregrine owes her stems from that severance deal in which she was promised $240,000 a year for 10 years.
Bodenstein is working to return funds to customers and has approval to disburse $123 million in claims.