U.S. Bancorp agreed to pay $18 million to former customers of Peregrine Financial Group Inc. to resolve claims that the large U.S. bank aided a massive fraud by the failed futures brokerage's now-imprisoned founder, Russell Wasendorf Sr., Reuters reported yesterday. A consent order approved yesterday resolves claims by the U.S. Commodity Futures Trading Commission that the Minneapolis-based lender's U.S. Bank NA unit let Wasendorf treat an account meant to hold Peregrine customer funds as his "personal piggy bank." The regulator's June 2013 lawsuit against U.S. Bancorp, one of the 10 largest U.S. banks by assets, was its first against a bank following Peregrine's bankruptcy 11 months earlier. Prosecutors said that Peregrine, which was also known as PFGBest, collapsed after Wasendorf stole roughly $215 million from more than 13,000 victims over nearly 20 years, covering his tracks by forging bank statements and submitting false regulatory reports. The CFTC said about $36 million of the funds misappropriated by Wasendorf came from a U.S. Bank NA account. Peregrine had been based in Cedar Falls, Iowa.
