* Wasendorf transferred to high-security Indiana prison
* Former tycoon had been isolated in Iowa cell
* Murderers, robbers, Somali pirate among fellow inmates
By Tom Polansek
Feb 28 Russell Wasendorf Sr., the former chief
executive of Peregrine Financial Group, has begun serving a
50-year sentence at a high-security federal prison in Indiana
for bilking $215 million from customers of the failed futures
Wasendorf, who turned 65 on Monday, arrived on Wednesday at
the U.S. Penitentiary in Terre Haute, Indiana, according to the
Federal Bureau of Prisons. It is the same facility at which
Oklahoma City bomber Timothy McVeigh was executed in 2001.
Now known as Inmate #12191-029, Wasendorf had been locked in
a county jail in Cedar Rapids, Iowa, since he confessed in July
to stealing from tens of thousands of clients over a period of
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 bars, the maximum allowed by law.
Federal marshals transferred Wasendorf to Indiana on a
private plane, according to the U.S. Marshals Service, giving
him a last taste of the high-flying life he previously enjoyed.
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.
The jail is a "good selection" by prison officials because
it is close enough to allow visits from Wasendorf's brother in
Iowa, said the former CEO's pastor, Linda Livingston. The
brothers had been estranged before Wasendorf's downfall.
However, Wasendorf is not a high security risk, said
Livingston, one of the few people who has had regular contact
"It will be better than where he has been," she said about
the federal prison, noting that Wasendorf ached for more human
contact after being held in isolation in the county jail.
"He would be delighted to be able to be involved in growing
a garden or cooking food in a prison setting," she said.
Livingston said she last saw Wasendorf, a former
restaurateur, on his birthday in the county jail and sang to
him. She arrived at the jail for a visit on Wednesday and was
told he was no longer there.
NO 'CLUB FED'
Wasendorf will need to watch his back in federal jail
because his fellow inmates will be tough, said Larry Levine, the
founder of Wall Street Prison Consultants, a firm that advises
prisoners and their families.
"He's going to be rubbing shoulders with people doing life
sentences, violent offenders," said Levine, who said he spent
time in federal prisons for securities fraud and drug
trafficking. "He's not in a Club Fed."
Other prisoners at Terre Haute include Ahmed Sala Ali
Burale, a Somali who in 2011 was sentenced to life in jail after
participating in a pirate attack that resulted in the death of
Prison officials considered the severity of Wasendorf's
crimes, the length of his sentence, and geography when they
assigned him to the prison in Indiana, 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
Wasendorf's life behind bars is tightly controlled. Upon
arrival, he was assigned khaki-colored pants, a khaki-colored
button-up shirt, gym shoes and underwear.
He will be expected to work, with potential jobs ranging
from cooking in the kitchen to sweeping floors, Burke said.
"A high-security facility is just that. It's a high-security
facility," he said.
An administrator at the federal prison did not return a call
seeking details about Wasendorf's living conditions.
The conditions may be harsher than those faced by Wall
Street con man Bernard Madoff. Madoff, who pleaded guilty in
2009 to running a multibillion-dollar Ponzi scheme, is serving a
150-year sentence in a medium-security North Carolina federal
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.