PGBest Founder Was Cedar Falls Philanthropist

Des Moines Register:

Wasendorf offered 401(k) plans for workers in his restaurants and PFGBest’s child care center, a rare luxury for service workers. His favorite quote, according to his Facebook page: “If I wanted patience, I’d buy it!”
He donated $2 million to the University of Northern Iowa athletic programs, the largest single donation in school history. His company’s charity arm, Peregrine Charities, donated $50,000 for technology scholarships at Hawkeye Community College in Waterloo.
“He and his company were real strong supporters of Panther athletics,” said Bill Calhoun, president of the UNI Foundation. “Russ was very concerned with enhancing the quality of life in the Cedar Valley.”
The charity also sponsored a triathlon. In 2011, it bought MRI equipment for St. Luke’s Hospital in Cedar Rapids and a cell-therapy machine for the University of Iowa, and it donated $100,000 to University of Iowa Hospitals.
“He was a big hero in this community, and he was also someone people looked up to,” said Anelia K. Dimitrova, editor of the Cedar Falls Times. “He was literally revered. I see him as a tragic figure now in the aftermath of what happened.”

I'm still trying to figure out how you run what appears to be a functioning commodities brokerage without actual money in the bank.  Did they actually transact customers' trades, or were they telling them they had the positions and they didn't?  This seems like an extremely difficult fraud to perpetrate.