Russell Wasendorf Sr., founder of futures broker Peregrine Financial Group, has pleaded guilty to a fraud involving 24,000 customers in the state of Iowa.
The embezzlement, totaling over $100 million, began some 20 years ago.
Russell Wasendorf Sr., 64, was once regarded as a noble figure who supported a range of institutions from health care to universities.
He now faces at least 24 years in jail. Prosecutors said: “He has gone from being a hero… to a villain.”
In court, Russell Wasendorf pleaded guilty to charges including mail fraud, embezzling customer funds and making false statements to two regulatory agencies.
Russell Wasendorf Sr, founder of futures broker Peregrine Financial Group, has pleaded guilty to a fraud involving 24,000 customers
In July he attempted suicide, writing a note that was found on his person confessing to the fraud.
The company he built up over 30 years is being dismantled by receivers who will attempt to refund some of the money taken from the 24,000-strong customer base.
Assets recently sold include a corporate jet and a publishing company which produced Russell Wasendorf’s books and magazines giving investment advice.
The receiver is also hoping to raise money from various properties including a restaurant, company headquarters that could be worth $20 million and a 4,000-bottle wine collection.
Peregrine’s customers invested mainly in commodities, including corn and gold.
They have not been able to access their accounts since the firm filed for bankruptcy in July but are expected to gain back an initial 30-40% of their investment in the coming weeks.
Groupon has swung into profit but weaker-than-expected revenue figures sent shares in the voucher firm sharply lower in after-hours trading.
Net income for the three months to the end of June was $28.4 million, against a loss of $107.4 million a year ago.
Revenue rose 45% to $568.3 million, and would have been higher but for a $32.4 million hit on exchange rates, the company said.
But investors had expected a higher figure and shares in the firm fell more than 10% in after-hours trading.
Groupon has swung into profit but weaker-than-expected revenue figures sent shares in the voucher firm sharply lower in after-hours trading
“Revenue was at the lower end of where they guided,” said Herman Leung, an analyst at Susquehanna Financial Group.
Groupon said it now had 38 million active customers, an increase of 65% on a year earlier.
It performed particularly well in North America, where revenues surged 66%.
“We had a solid quarter despite challenges in Europe and continued investment in technology and infrastructure,” said Andrew Mason, Groupon’s chief executive.
The company said total revenues would continue to grow, forecasting between $580 million and $620 million for the current quarter.
Groupon made its stock market debut in November at $20 per share and peaked above $31 a share.
They closed on Monday at $7.55, but fell below $6.50 in after-hours trading.