Russell Wasendorf Sr., founder of the bankrupt commodities firm Peregrine Financial Group Inc., has pleaded guilty to stealing more than $100 million from his customers.
Mr. Wasendorf, 64, admitted last week to embezzlement, mail fraud and two counts of lying to federal regulators in an appearance before U.S. Magistrate Judge Jon Scoles of the Northern District of Iowa in Cedar Rapids.
Mr. Wasendorf was handcuffed and wearing leg shackles during the hearing. He was taken into custody after U.S. District Judge Linda Reade stayed Mr. Scoles' ruling that Mr. Wasendorf could be released from custody until sentencing.
In response to the judge's direct questions, Mr. Wasendorf replied “guilty” to each of the four counts.
He made no other comment.
Assistant U.S. Attorney Peter Deegan told Mr. Scoles that Mr. Wasendorf could serve a life sentence under federal sentencing guidelines, although the plea agreement calls for a sentence of as long as 50 years.
Mr. Scoles said that he would recommend that Ms. Reade accept the plea.
She has not set a sentencing date.
Mr. Wasendorf's crimes came to light July 9 when the founder of Peregrine, who was also the company's chairman and chief executive, tried to kill himself by piping auto exhaust into the passenger compartment of his car, which was parked outside the firm's Cedar Falls headquarters.
In a written statement found with him then, he said that he had been stealing from the company for almost 20 years.
“I have committed fraud. For this I feel constant and intense guilt,” Mr. Wasendorf wrote in the confession.
“Through a scheme of using false bank statements, I have been able to embezzle millions of dollars from customer accounts at Peregrine Financial Group Inc.”
The amount missing from customer accounts is unclear. At the time of Mr. Wasendorf's arrest, the National Futures Association, an industry self-regulator, said that about $200 million in customer funds, which the firm had reported was on deposit at its bank, were unaccounted for.
Federal criminal charges were filed against Mr. Wasendorf under seal two days later. He was arrested July 13.