Published February 28, 2013
CHICAGO – Russell Wasendorf Sr., the former chief executive of Peregrine Financial Group, has been transferred to a high-security federal prison in Indiana to serve his 50-year sentence for bilking $215 million from customers of the failed futures brokerage.
Wasendorf, who turned 65 on Monday, arrived on Wednesday at the U.S. Penitentiary in Terre Haute, Indiana, which was once the home of convicted Illinois Governor George Ryan, according to the Federal Bureau of Prisons.
Now known as inmate #12191-029, Wasendorf had been locked in a county jail in Iowa, where Peregrine Financial was based, since he confessed in July to stealing from tens of thousands of clients over a period of two decades.
A federal judge in January sentenced Wasendorf, who had tried to kill himself just before the fraud was uncovered last year, to 50 years behind bar, the maximum allowed by law.
He pleaded guilty in September to embezzling more than $100 million, used to fund a life of luxury that included a private jet, extensive wine collection and lakefront condo in Chicago. Prosecutors said the amount stolen was more than $215 million.
Prison officials considered the severity of Wasendorf's crimes, the length of his sentence, and geography when they assigned him to Terre Haute, said Chris Burke, a spokesman for the Federal Bureau of Prisons.
Inmates with longer sentences are often jailed at high-security facilities because they are thought to present a greater risk for escape, he said.
The government also tries to place convicts in prisons within 500 miles of the facilities in which they were previously being held.
Wasendorf's life behind bars will be tightly controlled. He will wear prison-issued khaki-colored pants, a khaki-colored button-up shirt and prison-issued gym shoes and underwear.
He will be expected to work during the day, with potential jobs ranging from cooking food in the kitchen to sweeping floors, Burke said.
It's possible he will mix with violent offenders at Terre Haute, which counts 1,501 inmates in its high-security wing.
"A high-security facility is just that. It's a high-security facility," Burke said.
Wasendorf believes he will likely die behind bars, his pastor told Reuters last month.
As regulators closed in on his fraud last year, Wasendorf made a botched suicide attempt outside his $24-million headquarters in Cedar Falls, Iowa, which investigators say was financed with money siphoned from customers.
Peregrine Financial, known as PFGBest, quickly collapsed, and 24,000 former customers are still missing most of the money they had invested with the firm.
(Reporting By Tom Polansek; editing by Andrew Hay)