CEDAR RAPIDS - For years, Russ Wasendorf Sr. enjoyed the perks of being a successful businessman: a corporate jet, a fancy swimming pool at his mansion, an extensive wine collection and top chefs who made him meals at the restaurant and office buildings he owned.
Then last summer he admitted that his lavish lifestyle was a lie, built with money he stole from customers at Peregrine Financial Group, the Cedar Falls-based brokerage he founded. Prosecutors said he took $215 million over 20 years in the biggest fraud in Iowa history.
Wasendorf is now being held in isolation at a county jail in a tiny cell where he sleeps on a concrete pad without a pillow, his pastor said. And on Thursday, the 64-year-old learned he will most likely spend the rest of his life in federal prison.
Assistant United States Attorney Peter Deegan speaks to the media during a press conference to discuss the sentencing of Peregrine Financial Group owner and CEO Russell R. Wasendorf, Sr. at the US District Courthouse in Cedar Rapids, on Thursday.
A judge sentenced Wasendorf to 50 years in prison. Wasendorf, who must serve at least 42 years of the sentence, appeared in fragile health, having lost weight and suffering from health problems that made him look nothing like the image of a confident financial whiz he once projected.
Acting U.S. Attorney Sean Berry said the sentence was the longest ever given to a white-collar criminal in the northern district of Iowa and was fitting because Wasendorf's fraud was unparalleled in Iowa.
"This is a just sentence for a con man," he said at a news conference.
U.S. District Judge Linda Reade gave Wasendorf the maximum prison sentence available for the fraud and embezzlement charges to which he pleaded guilty in September. She cited the "staggering losses" his theft caused to 13,000 commodities investors who lost money and hundreds of employees who lost jobs.
Wasendorf used their money to build a business empire that included a publishing company that churned out his books and magazines, the jet that flew him to meetings, the nicest restaurant in Cedar Falls, a development company in Romania, and a charity known for donations to universities and hospitals.
But since last July, Wasendorf has been held in a cell on the fifth floor of the Linn County Jail in Cedar Rapids, where some of his fellow inmates scream all night long, said pastor Linda Livingston, who counsels him several times a week. She said he has not had access to writing or eating utensils and is kept away from other inmates.
"He has made an adjustment to an impossible circumstance with a grace that has surprised me," she said. "It's a stark existence."