IOWA CITY, Iowa — Federal prosecutors on Monday appealed a judge’s order that would free a disgraced businessman while he awaits sentencing for a $200 million fraud scheme at his Iowa-based brokerage.
The U.S. Attorney’s Office in Cedar Rapids filed paperwork asking Chief Judge Linda Reade to keep Peregrine Financial Group CEO Russ Wasendorf Sr. detained at the Linn County jail. Reade ruled hours later that Wasendorf would stay behind bars while she considered the appeal.
Prosecutors said Wasen-dorf presents a risk of fleeing abroad or committing suicide before his sentencing hearing, which has not been scheduled. He is likely to face a recommended sentence of at least 24 years to life in prison, they disclosed in the filing.
The filing came hours before the 64-year-old Wasen-dorf was to appear in federal court in Cedar Rapids to plead guilty to mail fraud, embezzling customer funds and lying to regulators. U.S. Magistrate Judge Jon Scoles ruled last week that Wasendorf could be released to live with his pastor in suburban Cedar Rapids after he formally entered his guilty pleas, saying he did not present a flight risk.
In the appeal, prosecutors said Scoles was mistaken in downplaying the risk of Wasendorf not showing up for sentencing. Wasendorf was arrested in July after attempting to commit suicide outside the Cedar Falls-based firm and leaving a note detailing how he made false bank statements for 20 years to prop up the company and embezzle customer funds.
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