Lawyers for Peregrine Financial Group Chief Executive Russell Wasendorf Sr said in a court filing that he is not likely to flee and objected to a U.S. government's motion to keep him in jail even after a magistrate ordered his release pending sentencing.
Wasendorf was expected to be released from an Iowa jail after pleading guilty to lying to regulators, mail fraud and embezzling more than $100 million customer money.
U.S. Magistrate Jon Scoles said that Wasendorf's chances to flee were limited as he had surrendered his passport and assets to authorities.
Pending sentencing for the crimes, Wasendorf will stay in the home of an Iowa pastor who has counseled him in prison and socialized with him in recent years, the order said. He will wear an electronic GPS monitoring device.
However, prosecutors later objected to the plan, and Chief Judge Linda Reade of the U.S. District Court of the Northern District of Iowa ruled that Wasendorf "shall remain detained pending further order of the court."
On Monday, Wasendorf's counsel argued in a filing with Iowa district court that the magistrate court properly concluded pretrial detention was not authorized in this case, because "the government failed to prove that there is a serious risk that Russell Wasendorf Sr. will flee."
"There is no evidence to suggest that Russell Wasendorf Sr, has, or ever had, any plans to leave his home, flee the jurisdiction, or travel to another country in an effort to avoid prosecution," the lawyers said in a court filing.
The case is USA vs Russell Wasendorf Sr, Case No.6:12-cr-2021, U.S. District Court, Northern District Of Iowa Eastern/Waterloo Division.
(Reporting by Sakthi Prasad; Editing by Louise Heavens)