PFG Founder Has No Money For Attorney

Peregrine Financial Group Founder and CEO Russell Wasendorf Sr.’s plan to hire a high-powered Chicago attorney to represent him has hit a snag: Wasendorf’s assets are frozen, so he has no money to pay him.

Russell Wasendorf Sr.
Source: PFG Best
Russell Wasendorf Sr.

Wasendorf had planned to hire attorney Thomas Breen, but Breen tells CNBC that because of the asset freeze, a public defender will represent Wasendorf instead.

And with the Justice Department, the Commodity Futures Trading Commission and a U.S. bankruptcy trustee all standing in line for Wasendorf’s assets, Breen says the situation is unlikely to change anytime soon.

Wasendorf is due in court Wednesday for a hearing to determine whether he can be held without bail as a flight risk, as well as whether there is probable cause to try him on charges he made false statements to regulators.

The commodity brokerage firm collapsed in spectacular fashion last week after revelations Wasendorf allegedly falsified bank statements. The 64-year-old CEO attempted suicide Monday, and prosecutors say he left a note detailing a 20-year fraud.

CNBC Investigations Inc.
CNBC Investigations Inc.

The public defender’s office in Cedar Rapids, Iowa, where Wasendorf is being held, said an attorney has not yet been appointed to represent Wasendorf.

Breen gained national attention in the 1980s for winning the freedom of Gary Dotson, whose rape conviction was overturned after his accuser, Cathleen Crowell Webb, recanted her testimony.

— By CNBC's Scott Cohn