Created on: January 23, 2013
Former CEO of Peregrine Financial Group Russell Wasendorf Sr. is facing a 50-year imprisonment sentence for his role in stealing more than $215 million worth of customers’ funds from his now defunct Iowa-based firm, according to a report from the Associated Press. He is presently in prison waiting for his sentence.
The former head of the financial firm garnered attention from authorities after he was found in his car outside of the company’s headquarters in Cedar Falls last August in an apparent suicide attempt. Wasendorf left a confession at the scene that highlighted how he forged documents and continually had private control of the entire firm’s finances.
Prosecutors argue that Wasendorf stole the huge sum of money when he founded and led the firm for close to two decades. Attorneys say he falsified financial statements in order to conceal the theft. A federal judge will issue his sentence on Jan. 31.
“Defendant used the stolen money to unlawfully bolster the apparent financial position of PFG, fund defendant’s outside business interests, and for defendant’s own personal use and purposes,” according to the plea document obtained by Bloomberg News in the case is U.S. vs. Wasendorf, 12-cr-2021, U.S. District Court, Northern District of Iowa (Cedar Rapids).
Wasendorf pleaded guilty for lying to federal officials and mail fraud, but he contends the company’s losses were less than $200 million, but prosecutors say they have evidence to prove that the final account is a lot higher.
“The actual loss in this case can be determined with remarkable precision,” said Acting Iowa U.S. Attorney Sean Berry said in a sentencing memorandum filed Tuesday.
Although the prosecutors are seeking a 50-year sentence on charges of embezzlement, mail fraud and lying to federal officials, they also want Wasendorf to pay restitution to his victims and cover the entire missing total in the fraudulent activities.
Lawyers representing the United States government explained that Wasendorf’s scheme dated back to 1993 when an investor known as “J.C.” originally helped finance the company but had pulled out a year later. Wasendorf had withdrawn $250,000 from customers’ deposited funds because he himself did not have the money to buy out the investor.
Since that time, a filing notes that Wasendorf used a copy machine to create falsified bank documents.
Earlier this month, Reuters reported that Wasendorf and his wife, Connie, were given a notice that they owed the state of Iowa $14.2 million in back taxes and penalties. From 2001 to 2009, the couple had allegedly under-reported their income during their time in Cedar Falls.
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