A judge on Thursday sentenced the founder of Peregrine Financial Group to 50 years in prison for looting hundreds of millions of dollars from the brokerage, saying his customers would probably never recover the money they lost.And from Tulsa World before the sentencing:
Russell Wasendorf Sr., who had tried to kill himself just before the fraud was uncovered last year, received the maximum sentence allowed by law and was ordered to pay $215.5 million in restitution for his nearly 20-year scheme.
A local hero in Iowa known for his charitable work and lavish lifestyle, Wasendorf triggered the collapse of the brokerage through his fraud. The scam shook investors' confidence in the U.S. futures industry, already rattled by the failure of larger rival MF Global less than a year earlier.
"I'm very sorry for the financial and emotional damage I've caused to investors and employees of Peregrine Financial Group," Wasendorf said in a feeble voice at a sentencing hearing in Cedar Rapids, Iowa.
"I feel I fully deserve whatever sentence I am given," he said. "My guilt is such I will accept that sentence."
Chief Judge Linda Reade of the U.S. District Court of the Northern District of Iowa said former Peregrine customers will probably never get all their money back....MORE
Victims jockey to maximize refunds in Iowa fraud case
The judge overseeing the bankruptcy of an Iowa brokerage is facing an unusual decision about how to distribute its remaining assets: Should customers whose highly regulated accounts were looted by the founder get larger refunds than those who had riskier investments that weren't touched?
Customers who traded foreign currency through Peregrine Financial Group Inc. say their money is sitting in bank accounts that can be traced directly to them - and they want it back. Yet seven months after the company collapsed when Chairman Russell Wasendorf Sr. confessed to a stunning fraud, they haven't received a dime.
Other customers who traded commodities such as oil and corn have received up to 40 percent back - even though Wasendorf looted their accounts to expand his business empire and fund his lavish lifestyle....MORE
