Victims jockey for refunds in $200M fraud case

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Posted: Thursday, January 31, 2013 12:00 am

IOWA CITY (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.

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