Business Business News Peregrine founder gets 50 years for fraud
Peregrine founder gets 50 years for fraud
- Details
- Published on Monday, 04 February 2013 00:00
- Written by AP
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CEDAR RAPIDS, Iowa — A judge sentenced Peregrine Financial Group Inc. founder Russ Wasendorf Sr. to 50 years in prison for stealing $215 million from investors and concealing his theft for 20 years.
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.
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.
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.
