Russell Wasendorf Jr., whose father went to prison for stealing $215 million from clients of the futures brokerage they ran together for nearly 20 years, is starting over.
The chief operating officer of Peregrine Financial Group, which collapsed in 2012 in an embezzlement scheme orchestrated by his father, has moved to Florida from the firm's home base of Cedar Falls, Iowa. He is out of the futures business entirely and has launched an e-commerce website.
In his first interview since Peregrine Financial's demise, Wasendorf Jr. said he has rejected offers to consult on futures and currency trading, his area of focus at the firm. According to records from the National Futures Association, he withdrew the last of his futures industry registrations just last week.
"I really want to just try to move on," Wasendorf Jr. told Reuters. "I don't have any real desire at this point to go back into that side of the business. I've been burnt awfully badly after spending 25 years of my life there."
Last July, Peregrine Financial's founder and CEO, Russell Wasendorf Sr., botched a suicide attempt at the firm's Cedar Falls headquarters. Before snaking a hose from the tailpipe of his car into the vehicle, he left a confession of his crimes along with a note begging his "wonderful son" for forgiveness.
Wasendorf Sr. was arrested and later pleaded guilty to embezzling his clients' money, and the firm filed for bankruptcy.
Wasendorf Jr. said he has not forgiven his father.
"As far as I am concerned, he died that day," he said.
Wasendorf Sr., 65, in February began serving what is expected to be a life sentence in a high-security federal prison in Terre Haute, Ind. At the time, his pastor said he was in poor health. He has not responded to a letter from Reuters requesting an interview.
(Read More: Regulators Missed Peregrine Warning Signs: Report)
Most of the firm's 24,000 customers have received back only about a third of the money they had in accounts at Peregrine Financial and are not expected to be made whole. The implosion shook investor confidence in the U.S. futures industry, already hurt by the failure of the larger MF Global less than a year earlier.
Wasendorf Sr. used little more than a rented post office box, Photoshop and inkjet printers to fake bank statements and hide money from regulators for years, according to his confession and statements from federal investigators.
He doctored the bank statements to show that accounts held more money than they actually did, while using clients' money to keep the company afloat and fund a lavish lifestyle.
Denies Involvement in Scam
Prosecutors said at Wasendorf Sr.'s sentencing earlier this year that the government did not anticipate filing further criminal charges relating to Peregrine Financial. But his son is facing a civil lawsuit that says he is partly responsible for the firm's collapse.
Wasendorf Jr., who turns 43 this month, also was president of the firm and oversaw day-to-day operations. In the interview, he denied any knowledge of or involvement in his father's scam.
"There's obviously plenty of reasons why he would have never told me about this, because I'd have never forgiven it," he said, his voice cracking.
That hasn't kept others from wondering.
Dan Roth, who heads the National Futures Association, said last fall that the sheer volume of documents that needed to be doctored to keep up the fraud suggests the father had help.
Contacted on Tuesday by Reuters, Roth said he stood by his comments and had nothing further to add.
No suspected accomplice has yet surfaced.
Wasendorf Jr. moved his family to Orlando, Fla., after the scandal and in April began an online service, Orange Tree Deals, aimed at giving entrepreneurs and neighbors a way to sell goods to one another, or even give them away for free.
The site requires buyers and sellers to register to use the site, making it more transparent, in his view, than an anonymous marketplace like Craigslist, Wasendorf said. He hopes entrepreneurs eventually use the site as a virtual storefront so that he can charge a commission on their sales.
On Wednesday, the site carried listings for products including a wine refrigerator, chandelier and penguin Halloween costume.
Attain Capital Management, a trading firm that saw its business drop 80 percent and had to lay off employees after it lost money when Peregrine Financial failed, believes Wasendorf Jr. did not know about his father's crimes, according to a blog post on its website.
"We truly wish him the best of luck," Attain said, referring to Wasendorf Jr.'s new venture.
CEO Jeff Malec declined to elaborate on the post.
Lawsuit Seeks Class Action Status
The lawsuit, which seeks status as a class action on behalf of all of Peregrine Financial's former clients, accuses the father of fraud; the son of helping him; and the banks, which held money for the firm, of facilitating the entire enterprise.
"As a direct and proximate consequence of the conduct of Wasendorf and Wasendorf Jr.," customers of Peregrine Financial, or PFG, "have lost a significant portion of the money, securities, and property they paid and delivered to PFG," the complaint read.
The banks are fighting the lawsuit and say they did nothing wrong.
The son is fighting, too, but says he does not have the money to pay for a long legal battle, let alone to make up for clients' massive losses. He said he is on the verge of bankruptcy because of the cost of defending himself.
Wasendorf said he felt betrayed by his father and did not plan to visit him in jail.
"Maybe someday I'll forgive it, but not right now," Wasendorf Jr. said. "It caused way too much damage to my family, to myself."