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Ceo Gets 50 Years in Prison: Russell Wasendorf of Peregrine Financial Group Stole Millions of Dollars From Firm

Travelers Today       By    Lena Vazifdar

Updated: Jan 31, 2013 06:00 PM EST

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Russell Wasendorf Sr
Former Peregrine Financial Group founder, Russell Wasendorf Sr. has been sentenced to 50 years in prison.(Photo : Reuters)

Former Peregrine Financial Group founder, Russell Wasendorf Sr. has been sentenced to 50 years in prison on Thursday. Reuters reported that Wasendorf had stolen hundreds of millions of dollars from the brokerage.

Wasendorf tried to kill himself before it was uncovered last year. He was also ordered to pay $215.5 million and was a 20-year scheme.

CBS reported that Wasendorf was found unconscious outside the headquarters of the company last July when he attempted suicide in his car by connecting a tube to an exhaust pipe. He also left a suicide note that confessed the fraud and said that "his ego was too big to fail."

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"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," reported Reuters.

Wasndorf said at the sentencing hearing in Cedar Rapids, Iowa "I'm very sorry for the financial and emotional damage I've caused to investors and employees of Peregrine Financial Group. I feel I fully deserve whatever sentence I am given," he said. "My guilt is such I will accept that sentence."

In July of last year he admitted to billing tens of thousands of clients for over two decades.

U.S. District Judge Linda read said to Wasendorf at the hearing that he caused "staggering losses" to investors, employees and creditors, reported CBS.

"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 according to CBS.

Wasendorf pleaded guilty for misusing $100 million or more to cover business losses.

Regulators found after his attempted suicide and admission that PFGBest couldn't account for more than $200 million in funds from customers that it was supposed to be holding. The firm filed for bankruptcy protection and nearly 24,000 customers could not access their accounts and have not been reimbursed for their losses, reported CBSL.

"Customers who opened accounts to trade commodities have received between 30 and 40 percent of their money back, while customers who traded foreign currency have received nothing because that activity has less legal protection," reported CBS.

Amongst Wasendorf's spending he used the money on things like a corporate jet, fancy restaurants in Cedar Falls, and a publishing company.

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