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U.S.

Founder of collapsed Iowa brokerage faces prison sentence that he always wanted to avoid

Associated Press
Published | Updated
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FILE - This Monday, April 4, 2011 file photo shows Russ Wasendorf, Sr., CEO of failed Peregrine Financial Group, Inc. in Cedar Rapids, Iowa. Wasendorf is expected to be sentenced Thursday, Jan. 31, 2013 to prison for embezzling up to $215 million in funds that were supposed to be held separately to protect investors. (AP Photo/Waterloo Courier, Rick Chase, File) (The Associated Press)

CEDAR RAPIDS, Iowa – The founder of a brokerage who hid his theft of customer funds for 20 years is about to face the moment he always wanted to avoid: being sentenced to prison.

A federal judge in Iowa on Thursday will sentence Peregrine Financial Group chairman Russ Wasendorf Sr. to prison. Federal prosecutors are asking for the maximum 50-year sentence. Even supporters of the 64-year-old say he's accepted the likelihood that he'll die behind bars.

Wasendorf attempted suicide last summer outside Peregrine's headquarters in Cedar Falls, shortly before regulators would learn that $200 million in customer funds was missing.

Wasendorf later pleaded guilty to fraud and embezzlement charges. He admitted that he created fake documents to cover up the theft, which he used to expand the business and fund a lavish lifestyle.