Peregrine Financial Group Chief Executive Russell Wasendorf Sr., who has confessed to bilking customers of his futures brokerage out of more than $100 million, is set to stay in jail after prosecutors objected to a plan to release him on Monday, according to a court order.
Wasendorf, 64, was expected to be released from an Iowa jail after he pleads guilty later on Monday to lying to regulators, mail fraud and embezzling customer money. A judge said last week that Wasendorf's chances to flee were limited as he had surrendered his passport and assets to authorities.
However, prosecutors on Monday objected to the plan, and another judge ruled that Wasendorf "shall remain detained pending further order of the court."
Prosecutors said Wasendorf should stay behind bars because there was a "serious risk" he may try to flee instead of facing the consequences of his crimes.
They cited the large amount of money Wasendorf stole and the strong evidence against him. Wasendorf claimed in a detailed suicide note that he bilked customers out of more than $100 million over nearly 20 years.
"Defendant's crime is nothing short of breathtaking," prosecutors said in a court filing.
Prosecutors said last week that Wasendorf had agreed to plead guilty to mail fraud, lying to federal regulators and embezzlement and could be sentenced to up to 50 years in prison.
Wasendorf attempted suicide on July 9 near the headquarters of his Cedar Falls, Iowa, brokerage. He was arrested on July 13 and charged with 31 counts of lying to federal regulators.
The search continues for the money he stole. Former clients are still unable to access funds frozen since the firm's bankruptcy on July 10.
The Commodity Futures Trading Commission has filed a lawsuit against Wasendorf and his firm, saying the CEO misappropriated more than $200 million in customer funds over several years.
(Editing by Gerald E. McCormick and Maureen Bavdek)