Russell Wasendorf Sr., the 64-year-old former CEO and founder of Peregrine Financial Group inc. pleaded guilty to fraud last September. He was sentenced this week to 50 years in jail for his role in the Ponzi scheme that cost investors and creditors $215.5 million according to federal prosecutors. He was also ordered to pay all $215.5 million in restitution. The sentence was the maximum possible jail sentence for the charges he was facing.
Mr. Wasendorf was accused of lying to federal regulators for nearly 20 years. He used money from new clients to pay back older clients and keep one step ahead of trouble. Investigators did not catch on to the problems at Peregrine until Mr. Wasendorf attempted suicide and left a note, acknowledging his fraudulent activities. He had recently eloped when he was found slumped in his vehicle after the attempt.
Peregrine was forced into bankruptcy after the extent of the fraudulent activity was discovered. The business had only been made to appear profitable by the misrepresentations of Mr. Wasendorf. His son was an executive in the business, but Russell Wasendorf Sr. has maintained that he was alone in the work to mislead regulators. No other members of Peregrine Financial have yet been charged with any misconduct.
The maximum sentence of 50 years was given despite the accused having worked with prosecutors throughout the process and having pleaded guilty. Mr. Wasendorf has a tumor on his pancreas and has been in poor health for some time.
Source: Huffington Post, "Peregrine CEO Russell Wasendorf Sr. Sentenced To 50 Years In Prison," by P.J. Huffstutter, 31 January 2013