A judge sentenced Peregrine Financial Group Inc. founder Russ Wasendorf Sr. to 50 years in prison on Thursday for stealing $215 million from investors over 20 years in what a prosecutor called the biggest fraud in Iowa history.
U.S. District Judge Linda Reade told Wasendorf, 64, that the stiff sentence was warranted because of the “staggering losses” his greed caused to more than 13,000 investors, employees and creditors over 20 years.
Instead of having the courage to admit his company was a failure since its inception in the early 1990s, she said Wasendorf lavishly spent clients’ money to make himself look like “a big shot,” Reade said. Last summer’s collapse of the company, nicknamed PFGBest, rippled across the financial industry, affecting regulatory agencies and the U.S. as a whole.
Wasendorf pleaded guilty in September to misusing at least $100 million to cover business losses at PFGBest and a range of personal expenses. This week, he agreed with prosecutors that he caused $215 million in losses. Reade ordered Wasendorf to pay that amount in restitution, but said it was “highly unlikely” the victims would ever be compensated in full.
Wasendorf hid the theft from colleagues and regulators by making phony financial statements for nearly two decades that made the company appear healthy.