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February 5, 2013

Wasendorf: 50 years for 'incalculable heartache'

Russell Wasendorf spent 20 years cultivating an image of a modern-day renaissance man: a visionary business leader, restaurateur, philanthropist and publisher. It was all part of the biggest fraud, by dollar amount, in Iowa history.

“The truth finally caught up to Wasendorf on Thursday, when he was sentenced to 50 years for pilfering more than $215 million from customer funds.

The 64-year-old will be at least 107 years old by the time he’s eligible for release for good behavior.

“This is a very serious offense with staggering effects to the victims and ripple effects,” U.S. District Judge Linda Reade said as she handed down the maximum possible prison term. “The sentence I impose must be a deterrent to others.””

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The uncovering of the scam exacerbated a loss of confidence in the futures and commodities market that began in November 2011, when $1.6 billion came up missing from customer accounts at MF Global. It helped speed new regulatory tools that allow regulators to see customer fund balances in real time, instead of relying on pen and paper correspondence by mail.

Dennis Kelleher, chief executive officer of Better Markets Inc., a group lobbying for tighter government scrutiny of financial markets, said more needs to be done to safeguard investors.

“For his decades-long egregious breach of trust and criminal behavior, 50 years is not enough,” Kelleher said. “And, the conduct of everyone who helped him, should have caught him, or benefited in any way from his crimes must be scrutinized. And, if appropriate, they too should be punished harshly. Only aggressive prosecution of all involved will have a deterrent effect.””

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Read full Des Moines Register article here

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