Ex-CEO sentenced to 50 years for stealing $215M

Russell Wasendorf Sr. / PFGBest

Last Updated 1:49 p.m. ET

CEDAR RAPIDS, Iowa A judge sentenced Peregrine Financial Group Inc. founder Russ Wasendorf Sr. to 50 years in prison on Thursday for stealing $215 million from investors and concealing his theft for 20 years.

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U.S. District Judge Linda Reade told Wasendorf at the hearing in Cedar Rapids that he knowingly caused "staggering losses" to investors, employees and creditors that grew larger over 20 years.

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Reade said Wasendorf, 64, lacked the courage to stop his fraud sooner and admit his company was a failure from its inception in the early 1990s.

She also said the collapse of Peregrine Financial Group had rippled across the financial industry, affecting regulatory agencies and the nation as whole.

"By imposing a substantial sentence, the court sends a message that white collar criminals may serve long prison sentences for stealing money from other people," Reade said.

Wasendorf appeared frail at the sentencing. His attorney said he'd lost a substantial amount of weight while being held in jail.

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Before the sentencing, Wasendorf issued a broad apology for the damage he caused and said he would accept any sentence imposed.

Wasendorf pleaded guilty in September to misusing at least $100 million to cover business losses at his Cedar Falls-based brokerage, which did business as PFGBest, and a range of personal expenses. He admitted that he hid the theft from colleagues and regulators by making phony financial statements for nearly two decades.

Wasendorf was found unconscious outside the company's headquarters last July after attempting suicide in his vehicle by connecting a tube to his exhaust pipe. He left a startling suicide note confessing to the fraud, saying he started stealing because his "ego was too big to fail," that he did not feel bad about duping regulators he felt were overzealous, and had learned to make "convincing forgeries" of bank and financial statements using printers and scanners.

Regulators immediately discovered PFGBest could not account for more than $200 million in customer funds it was supposed to be holding, and the firm filed for bankruptcy protection. Some 24,000 customers were unable to access their accounts and still have not been fully reimbursed. Customers who opened accounts to trade commodities have received between 30 and 40 percent of their money back, while customers who traded foreign currency have received nothing because that activity has less legal protection.

Wasendorf used their money to build up a business empire that included a publishing company, a corporate jet, the nicest restaurant in Cedar Falls, and a family charity known for making donations to universities and hospitals.

Customer money also helped build what was perhaps the biggest symbol of Wasendorf's home-grown success with a firm he started in a basement 30 years ago: PFG's $20 million headquarters, a three-story glass building that opened in 2009 and included a gym, a daycare center, a Montessori school, and a restaurant. Today, the building is largely empty and up for sale.

[Angela1207]

Stealing cases nowadays are alarming. More alarming because the people being involved are those trusted people by the society and they are taking risk to commit crime just to fulfill their luxurious wants. We wouldn't know what they are capable with just for money or luxury. They may not hurt now, but what if we come into their way? Would we still be safe?. I'm proud to say that I have in hand a reliable way to get help if I'll be put in similar situations. It's a personal safety solution designed for adults to give the subscriber a safety measure in similar circumstances like the one relayed above. I checked it out and it's amazing. If ever you have an accident or any emergency and you're hurt, you can alert your family or friends. Plus 911 will be automatically notified of your location and profile for more efficient response.

[boforillo]

Why didn't the SEC (Securities and Exchange Commission) catch on to this guy earlier? Oh, I remember now! They were surfing for pornography instead of working for the taxpayers.

http://abcnews.go.com/GMA/sec-pornography-employees-spent-hours-surfing-porn-sites/story?id=10452544

I'm so glad they could help protect us from this type of evil scum!

[ammo17]

i might be wrong but i think the big banks,mortgage companies and wall st. make this guy`s crime seem like small change.how come none of them are going to prison?i just don`t understand our justice dept.seems like they are playing favorites.

[michaelamsterdam]

Well...perhaps he can take solace in the knowlege that it still comes out to well over $4 million a year...

Or perhaps not...

[WhereisOT]

What? You mean 1 out of many finally goes down...
Guess its a start...

How about the rest of the bast*rds...Make em payup here, before they payup in the dark elsewhere..

"Madness is badness of spirit, when one seeks profit from all sources"..
Aristotle

[taxed01]

He broke the law. Shouldn't he be getting Amnesty?

[normtrek]

Wasendorf issued a broad apology for the damage he caused and said he would accept any sentence imposed.WOULD ACCEPT???? YOU HAVE NO CHOICE *******!!!!

[cleric77]

How hard it is for rich people to get into God's Kingdom!" (Mark 10:24)
It appears that this CEO had made (money) his god; but at least he will have time to repent and change his god to the one true God, Maker of heaven and earth! while he is in prison!

[cbs_bull]

Hope those crooks on the Wall Street who caused the 2008 crisis get 50 years like him. But we haven't seen any of them going to jail.