CEDAR RAPIDS, Iowa (AP) — Peregrine Financial Group CEO Russ Wasendorf Sr. pleaded guilty Monday to carrying out a 20-year fraud that duped investors and transformed his image from a highly-regarded businessman to one of Iowa's most notorious corporate criminals.
During a court hearing in Cedar Rapids, Wasendorf admitted to the $200 million fraud that he first confessed in a note found on him after an unsuccessful suicide attempt in July. The 64-year-old pleaded guilty to charges of mail fraud, embezzling customer funds and making false statements to two regulatory agencies.
Wearing an orange jail-issued jumpsuit, Wasendorf repeatedly answered "yes, your honor" as he admitted guilt to each element of the four felony counts.
"Did you embezzle or steal customer funds here in this district?" U.S. Magistrate Judge Jon Scoles asked.
"Yes, your honor," replied Wasendorf, who later repeated "guilty" four times when asked how he pleaded to the charges.
Prosecutors said Wasendorf likely will face a recommended minimum sentence of at least 24 years in prison at his sentencing hearing, which was not immediately scheduled.
U.S. District Judge Linda Reade ruled Monday that Wasendorf would remain in the Linn County jail while she considers the prosecution's claim that he poses a risk of fleeing abroad or committing suicide before sentencing. A magistrate ruled last week that Wasendorf could be released after Monday's plea hearing to live in suburban Cedar Rapids with his pastor before sentencing, but prosecutors appealed.
The guilty plea marks the latest step in the stunning downfall of a businessman and philanthropist who was well-known in financial circles and a major player in Cedar Falls. It comes as a receiver is dismantling the business empire and image that Wasendorf built over decades to pay back the 24,000 customers who are missing money.
The receiver has already gotten rid of Wasendorf's corporate jet, and is trying to sell the company that published Wasendorf's books and magazines on investing. Wasendorf's family charity, known for donations to universities and hospitals, has been frozen. The receiver is also moving to sell Wasendorf's homes, his 4,000-bottle wine collection, the upscale restaurant he owned in Cedar Falls, and the $20 million company headquarters that stood as a symbol of Wasendorf's home-grown success with a firm he started in an Iowa basement 30 years ago.