U.S. Markets open in 6 hrs 14 mins

Wasendorf again seeks release: 'Iowa is his home'

Ryan j. Foley, Associated Press

IOWA CITY, Iowa (AP) -- The attorney for an Iowa investment broker who pleaded guilty to misusing $200 million in customer funds says her client should be released from jail before sentencing so that he can spend time with his wife and friends before he leaves for prison.

Defense attorney Jane Kelly argued in a court filing late Monday that Peregrine Financial Group CEO Russ Wasendorf Sr. couldn't flee the country since his homes, cars, passport and other assets have been seized. She said he also wouldn't want to leave because his family and support system is in Iowa, "and, quite simply, Iowa is his home."

"Russell Wasendorf, Sr., has strong incentive to abide by terms and conditions of release, so that he can maximize the time he can spend with his wife, his family, and his friends before he is sentenced," Kelly wrote to U.S. District Judge Linda Reade.

Wasendorf, 64, pleaded guilty last week to misspending investor funds over a 20-year period at his Cedar Falls-based brokerage and lying to cover it up. Prosecutors oppose his release before sentencing, which hasn't been scheduled, because they believe he may try to flee or attempt suicide again to avoid going to prison.

U.S. Magistrate Judge Jon Scoles approved a plan earlier this month to release Wasendorf to live in the suburban Cedar Rapids home of Linda Livingston, a pastor who has counseled him and went to high school with Wasendorf in Marion. The plan would require Wasendorf to be confined to the home under GPS monitoring except for special circumstances, and a woman he secretly married in Las Vegas days before his July arrest, Nancy Paladino, also pledged to move in to support him.

But prosecutors appealed last week hours before Wasendorf was to be freed, and Reade put the plan on hold until she can rule on the appeal. Wasendorf's bid for release also was dealt a legal setback after his guilty pleas, which flipped the burden of proof from prosecutors to show he was a flight risk to him to prove by "clear and convincing evidence" that he is not.

In her motion, Kelly argued Wasendorf has met that burden. She said he never made plans to flee even though he knew for years his fraud would eventually be uncovered. Kelly also rejected prosecution claims that Wasendorf may have hidden assets, saying he has voluntarily provided investigators with information to locate them and to show where the money went.

Kelly said that Wasendorf, who attempted to commit suicide when the fraud was exposed in July, is no longer suicidal.

"His outlook on life and attitude toward the future have improved dramatically," she wrote, "and he is happy to be alive."