* Peregrine shortfall contrasts with outlook for MF Global
* Romanian venture, once worth $1 bln, has little value
* Wasendorf's receiver asks IRS to put firm's clients first
CHICAGO/SAN FRANCISCO July 3 (Reuters) - Russell Wasendorf Sr., who is serving a 50-year prison sentence for embezzling $215 million from clients of his failed futures brokerage, appears to have told the truth about one thing: he spent nearly all the money.
Almost a year after Wasendorf's Peregrine Financial Group imploded in the wake of his fraud, the receiver in charge of selling the disgraced CEO's assets has netted just $3.6 million for bilked customers, according to court documents filed in the bankruptcy of his firm.
The total is disappointing for former Peregrine customers just a week after U.S. regulators said that clients of MF Global, another bankrupt futures brokerage, would recover all of their missing money.
To drum up money for customers, Peregrine's receiver liquidated nearly all of Wasendorf's property - his two homes and a flashy corporate headquarters, his wine and his cars, his boat and plane, his restaurant and his life insurance policy. Even that sum will be docked in coming months to pay some of the estate's expenses.
"He lived very big and very showy, and unfortunately there is very little left," Wasendorf's receiver, Michael Eidelman, said in a telephone interview on Wednesday.
"You wouldn't have thought it would be possible to spend $200 million, but there was a succession of absolutely horrible deals."
The bad deals included a "Taj Mahal" of a corporate headquarters built for $21 million at the end of a dirt road in Iowa, a now insolvent Romanian real estate venture, and a sprawling home with cramped rooms and a pool that costs $10,000 a month just for upkeep.
All told, Eidelman made about $5.8 million selling Wasendorf's properties, a fraction of what they cost to acquire, the court filing showed. Peregrine's headquarters sold for just $2.4 million. Some of the proceeds then had to be paid to the bank that financed the properties, reducing the total take.
Peregrine's customers had been holding out hope that more of the missing money was tucked away in property that could be sold. The firm's 24,000 customers have so far received a total of about $123 million, amounting for most of them to about a third of what they had in their accounts.
Customers had about $376 million at Peregrine before it failed, according to records the firm submitted to regulators that Wasendorf later admitted were falsified.
The broker's bankruptcy trustee, Ira Bodenstein, has $134 million left, a cash summary from mid-June shows, a sum that includes money that had been the firm's own. The figure suggests customers may eventually get back as much as two-thirds of their money.
Bodenstein has said he will continue trying to round up money for customers.
Peregrine Financial filed for bankruptcy protection in Chicago on July 10, 2012, after Wasendorf, the firm's founder and chief executive, botched a suicide attempt at the firm's Cedar Falls, Iowa, headquarters. Wasendorf was arrested and later pleaded guilty to embezzling his clients' money.
Wasendorf, 65, in February began serving what is expected to be a life sentence in a high-security federal prison in Terre Haute, Indiana. At the time, his pastor said he was in poor health. He has not responded to letters from Reuters requesting an interview.
MF Global failed in October 2011 under the weight of aggressive bets on European sovereign debt. The Commodity Futures Trading Commission last week charged former chief Jon Corzine over the collapse and settled with MF Global Inc, which agreed to pay a $100 million penalty and funds still owed to customers.
Regulators and futures firms have debated the merits of an insurance policy to cover such losses in the future, but many say the costs would be too high.
ROMANIA OR BUST
Wasendorf hid his fraud for nearly 20 years, fooling regulators with doctored bank statements and using clients' money to keep the company afloat and fund a lavish lifestyle, according to his confession and statements from federal investigators. In a signed statement left at the scene of his attempted suicide last July, Wasendorf said "most" of the embezzled funds were gone.
Eidelman's report, filed late on Tuesday in federal court in Chicago, shows the lengths to which he has gone to try to prove Wasendorf wrong. On May 1, he and Bodenstein traveled to Romania for 2-1/2 days to assess the potential value of Wasendorf's stake in the 32 parcels of property that make up his venture there, according to the filing.
At its height in 2007, the company, Avrig 35 Group, was valued at more than $1 billion.
Now, there is "little to no value to be extracted" from Wasendorf's interest in the Romanian company because of a weak property market and the company's defaults on bank loans, Eidelman said. He is negotiating with two parties that may be interested in acquiring the stake.
Eidelman said there may be some money he can recover from people who received payouts from Wasendorf's charity and other funds before Peregrine's bankruptcy. However, he concedes there's little chance his pool of funds will do much to dent the huge losses Peregrine Financial's former clients have suffered.
"My contribution ... is going to be modest," he told Reuters.
Eidelman expects to finish all his work in the bankruptcy by the end of the year and to propose a final distribution of assets to creditors of Wasendorf's estate.
The size and date of Eidelman's last distribution depend on the outcome of talks with the IRS over how to report Wasendorf's embezzled income to the government, according to the filing. Eidelman wants the IRS to agree that former Peregrine customers will be first in line to receive payouts from the estate.
Determining Wasendorf's tax liability in itself is a gargantuan task. The cost for simply determining how much he owes would likely surpass the amount of money left in the receiver's accounts, Eidelman said.