Russell Wasendorf Sr., the indicted founder of Peregrine Financial Group Inc. who tried to kill himself in July, will be freed on bail after he pleads guilty to embezzlement on Sept. 17, a judge said.
“Following defendant’s plea of guilty, the court will review with defendant the terms of an order setting conditions of release,” U.S. Magistrate Judge Jon Scoles in Cedar Rapids, Iowa, said in a written ruling today. “Defendant will be released at that time.”
Wasendorf, 64, has been jailed since his July 13 arrest on charges he lied to U.S. regulators about the amount of client funds his Cedar Falls, Iowa-based firm had on deposit at its bank. He was indicted on 31 counts last month.
His agreement to plead guilty to two false-statement counts and individual counts of mail fraud and embezzlement was disclosed by an FBI agent at Wasendorf’s bail hearing on Sept. 11. He may receive a prison sentence of as long as 50 years, according to a copy of the plea agreement posted on the court’s electronic docket today.
At least $190 million in Peregrine client funds are unaccounted for, the liquidating trustee in the firm’s bankruptcy case told creditors during a meeting at the federal courthouse in Chicago on Sept. 10.
Wasendorf, in a note written before a failed suicide attempt on July 9, said he’d been stealing from the firm for almost 20 years, Scoles said in today’s ruling.
Prosecutors opposed his release on bail, arguing Wasendorf was still a suicide risk as well as a flight risk. He has been on suicide watch at the Linn County Jail since his arrest, the judge said.
Wade Kisner, a spokesman for Cedar Rapids U.S. Attorney Stephanie Rose, declined to comment on the court’s decision.
Scoles said in his ruling that Wasendorf would be confined to the home of his friend and pastor, Linda Livingston, and ordered to wear an electronic monitoring device.