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Peregrine Financial Group Founder Released Pending Sentencing

Russ Wasendorf Sr., founder of Peregrine Financial Group could spend some time outside of his jail cell prior to sentencing. Jon Scoles, U.S. Magistrate Judge has ordered that Wasendorf be released from his Cedar Rapid jail cell as he awaits sentencing on charges of fraud.

Wasendorf is expected to plead guilty to more than 20 years of fraudulent actions including embezzlement of customer money, lying to regulators and mail fraud. Due to suicide notes left for his wife and son, he is expected to be confined to a friend and his pastor, Linda Livingston. He will be placed on house arrest, wearing a GPS tracking device and will only be permitted to leave the residence under very strict conditions.

The plea agreement which was 17 pages long states that Wasendorf has embezzled and misappropriated more than $100 million in funds from investors in order to keep his organization from going bankrupt. The agreement also states that he sent in phony documents to two different regulatory agencies regarding this spending.

He could face up to 50 years in confinement and be force to pay back twice as much as he embezzled. The agreement also prohibits Wasendorf from profiting from the fraud book or movie sales. While he is permitted to allow books or movie scripts to be written about his case, he is ordered to turn over any profits to the government so that victims of his fraud can be compensated justly.

The agreement outlines how he withdrew customer funds and used those funds to keep his company running. False bank statements were created on computers so that the actions could not be tracked. These false statements were used to show that his company held over $200 million more than it had in reality in customer funds.

The suicide note that Wasendorf wrote outlines more of his actions and states that he began forging company documents during the 1990s after a regulator audited him and forced him to begin increasing funds held for customers.

03.09.2012. 16:57