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Victims jockey to maximize refunds in PFGBest case

January 30, 2013 • Business


FILE – This Monday, April 4, 2011 file photo shows Russ Wasendorf, Sr., CEO of failed Peregrine Financial Group, Inc. in Cedar Rapids, Iowa. Wasendorf is expected to be sentenced Thursday, Jan. 31, 2013 to prison for embezzling up to $215 million in funds that were supposed to be held separately to protect investors. (AP Photo/Waterloo Courier, Rick Chase, File)

IOWA CITY, Iowa (AP) — The judge overseeing the bankruptcy of an Iowa brokerage is facing an unusual decision about how to distribute its remaining assets: Should customers whose highly-regulated accounts were looted by the founder get larger refunds than those who had riskier investments that weren’t touched?

Customers who traded foreign currency through Peregrine Financial Group, Inc. say their money is sitting in bank accounts that can be traced directly to them — and they want it back. Yet seven months after the company collapsed when Chairman Russell Wasendorf Sr. confessed to a stunning fraud, they haven’t received a dime. Other customers who traded commodities such as oil and corn have received up to 40 percent back — even though Wasendorf looted their accounts to expand his business empire and fund his lavish lifestyle.

Wasendorf is expected to be sentenced Thursday to a lengthy prison term for embezzling up to $215 million that investors trusted with the Cedar Falls-based Login to read more

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