CEDAR RAPIDS, Iowa --- The founder of Peregrine Financial Group has been sentenced to 50 years in prison.
Judge Linda Reade sentenced Russell Wasendorf Sr., 64, of Cedar Falls, Thursday in U.S. District Court in Cedar Rapids.
It was the maximum sentence allowed under law and what the government had requested for Wasendorf’s guilty pleas to four charges --- embezzlement of customer funds, mail fraud, false statement to the Commodity Futures Trading Commission and false statements to the National Futures Association.
Wasendorf hung his head for most of the hearing and appeared disinterested in the proceedings.
He apologized for his actions, telling the judge any punishment he receives from the court was nothing compared to the punishment he caused for himself.
“I feel I fully deserve whatever sentence I’m given today,” he said.
He said he lost the love of his son and will never be able to see his grandchildren again.
Waterloo attorney and former Congressman Dave Nagle took for the defense and recounted how he helped Wasendorf obtain a zoning change for PFG’s headquarters in rural Cedar Falls.
Nagle said he was impressed that Wasendorf wanted to construct an environmentally friendly building and “kept his word” in following through with the plan.
He said Wasendorf was a good employer and should be given credit for his involvement in the community and with charity.
“He didn’t keep it all for himself, he did share,” said Nagle, noting “good people do bad things.”
Prosecutors said Wasendorf’s scheme dated back to the 1990s and resulted in $215 million in damages. The defense had claimed the damage was lower but dropped that claim this morning.
Reade declined to grant Wasendorf any additional leniency for his cooperation or his charity work, saying by the time he began to help authorities, they already had an outline of the crime in his suicide note. She also noted his charitable donations were with stolen money.
“It’s easy to be generous with other people’s money,” Reade said.
She also granted the government’s motion to enhance the sentence because he used sophisticated means to steal.
She imposed 20 years for the fraud charge added to 10 years each for the embezzlement and false statement charges.
Prosecutors said the punishment was the longest white collar sentence against Northern Iowa’s biggest con man.
“By lying to investors and regulators, Wasendorf defrauded thousands of innocent investors out of a staggering $215,000,000,” said Acting United States Attorney Sean Berry. “The lengthy prison sentence imposed today is just punishment for a con man who built a business on smoke and mirrors.”
Thomas Metz, special agent in-charge of the FBI’s Omaha Division, said “today’s sentence demonstrates this agency’s commitment to holding accountable those who prey on unwary investors and lie to those regulatory agencies responsible for protecting the integrity of U.S. financial markets.”
If he is ever released from prison, Wasendorf must also serve a three-year term of supervised release.
Reade imposed forfeiture in the amount of $100 million and ordered Wasendorf to make $215,530,041.39 in restitution to more than 13,000 victims.
As part of the plea agreement, Wasendorf agreed that any proceeds from any publicity about his crimes would be assigned to the United States and applied toward his restitution.
In letters left during a July suicide attempt, Wasendorf admitted to siphoning client funds to keep PFG afloat after he claimed regulators caused the business to stumble.
He said after that, he used bogus bank statements to hide PFG’s true condition from auditors and kept others at the firm in the dark.