Prosecutor: CEO in Iowa fraud case admits to fraud

The founder of an Iowa brokerage has signed a plea agreement with federal prosecutors in which he admits to carrying out a $200 million fraud and embezzlement scheme that bankrupted his company.

At a hearing Tuesday, Prosecutors said Russ Wasendorf Sr. will plead guilty to mail fraud, embezzling customer funds and two counts of making false statements to regulators.

U.S Magistrate Judge Jon Scoles confirmed the agreement but hasn't ruled on the matter.

Prosecutors say the agreement calls for Wasendorf to be sentenced to up to 50 years in prison.

Details of the agreement were made public during a hearing in federal court in Cedar Rapids called to determine whether Wasendorf should be freed from jail pending his plea hearing and sentencing.

The hearing was continuing Tuesday afternoon.

AP