Wasendorf Pleads Guilty|to $100 Million Fraud

(CN) - Former Peregrine Financial CEO Russell Wasendorf Sr. pleaded guilty Monday to stealing "at least $100 million" from his commodity futures business, federal prosecutors said.

Wasendorf, 64, of Cedar Falls, Iowa, pleaded guilty to mail fraud, embezzlement, making false statements to the Commodity Futures Trading Commission, and making false statements to a registered futures association, in Cedar Falls Federal Court.

Prosecutors said Wasendorf admitted he stole "at least $100 million" from his customers, and overstated the amount of customers' funds by "more than $200 million."

Wasendorf made national headlines in July when he tried, but failed, to kill himself, as Peregrine Financial collapsed. He stole the money from 24,000 customers, according to news reports at the time. He was highly regarded in Cedar Falls as a philanthropist until his fall from grace.

He faces up to 50 years in federal prison and up to $3.25 million in fines.

Wasendorf admitted that he stole the money from the early 1990s through July 2012.

"Wasendorf admitted he stole the funds, at least in part, by secretly withdrawing money from a customer segregated bank account, and then omitting the withdrawals and inflating the balances on forged bank statements purportedly issued by the bank," the U.S. Attorney's Office for the Northern District of Iowa said in a statement.

"Wasendorf admitted that the forged bank statements overstated the amount of customer funds in the account by more than $200 million."

He also admitted that he lied to the National Futures Association and the Commodity Futures Trading Commission by submitting false reports and forged bank account verification forms.

Under the plea agreement, Wasendorf agreed to forfeit $100 million and agreed to pay full restitution.

He will be sentenced by U.S. District Judge Linda R. Reade, after a presentence report, the U.S. attorney said.

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