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Cedar Rapids, Iowa - 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 nation as a whole.
"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.
Wasendorf, who has been kept in an isolation unit since last summer, seemed frail in his orange prison jumpsuit. His attorney said he'd lost a substantial amount of weight behind bars and was suffering from serious health problems, including a tumor on his pancreas that doctors are testing for cancer.
Before he was sentenced, Wasendorf issued a broad apology for the damage he caused and said he would accept any punishment.
"I just want to say I'm very, very sorry for the financial and emotional damage I have caused to investors and employees of Peregrine Financial Group," Wasendorf said.
He said he regretted the damage "my deceit has caused" the industry and his community and family. He also said any sentence would pale in comparison to the punishment of being estranged from his son, Russ Wasendorf, Jr., who helped him run the company and has been described as shocked about the fraud.
"I've lost the love of my son, and I'll never see my grandchildren again," Wasendorf said, breaking up.