Founder of Iowa brokerage pleads not guilty

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Associated Press

Posted on August 17, 2012 at 1:00 PM

Updated Friday, Aug 17 at 3:00 PM

CEDAR RAPIDS, Iowa (AP) — The founder of an Iowa-based brokerage has pleaded not guilty to fraud charges stemming from a suspected $200 million embezzlement scheme that drove his firm to bankruptcy and ripped off thousands of customers.

Peregrine Financial Group, Inc. CEO Russ Wasendorf Sr. entered the plea at an arraignment hearing Friday in Cedar Rapids federal court. He is charged with 31 counts of lying to regulators.

Wasendorf's image as a prominent businessman and philanthropist crumbled when he was found in his car outside Peregrine's headquarters in Cedar Falls unconscious after attempting suicide last month.

Investigators say they found a suicide note in which he confessed to a 20-year fraud scheme, and admitted during an interview from his hospital bed to stealing at least $100 million from customers.

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