* Wasendorf expected to plead guilty on Monday
* Judge says CEO is not a flight risk
* Wasendorf will live with pastor, wear monitoring device
* Prosecutors to say at sentencing how much money is missing (Adds customer reaction, details on missing funds)
By Tom Polansek
CHICAGO, Sept 13 (Reuters) - Peregrine Financial Group Chief Executive Russell Wasendorf Sr., who has confessed to stealing more than $100 million from his futures brokerage's clients, will be released from jail after he pleads guilty on Monday to mail fraud, lying to regulators and embezzling customer money, according to a judge's order.
Pending sentencing for the crimes, Wasendorf, 64, 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.
In approving Wasendorf's release, U.S. Magistrate Judge Jon Scoles said Wasendorf's chances to flee were limited as he had surrendered his passport and assets to authorities.
"All of Defendant's known assets have been seized or restrained, and there is no evidence Defendant has access to any other ready assets," the order said.
Prosecutors said this week that Wasendorf had agreed to plead guilty to mail fraud, lying to federal regulators and embezzling customer money and could be sentenced to up to 50 years in prison.
Wasendorf attempted suicide on July 9 near the headquarters of his Cedar Falls, Iowa, brokerage and left a signed confession of a 20-year-long fraud.
He was arrested on July 13 and charged with 31 counts of lying to federal regulators.
The search continues for the money he stole. Former clients are still unable to access funds frozen since the firm's bankruptcy on July 10.
Once released, Wasendorf will be confined to the home of Linda Livingston, a pastor at Ascension Lutheran Church, and her husband in Marion, Iowa, where Wasendorf was raised.
He will wear an electronic monitoring device and be allowed to leave the house only for religious services, medical emergencies, and court-ordered obligations.
Wasendorf claims he is no longer suicidal, according to the order. He takes medication for an overactive thyroid, gout, arthritis and an iron deficiency.
The Livingstons have socialized periodically with Wasendorf and his then-fiance Nancy Paladino during the past six years, and the pastor has visited Wasendorf in Linn County Jail in Iowa three to four times a week since his arrest.
Wasendorf married Paladino two weeks before he attempted suicide. She filed for an annulment last month, but has offered to stay with Wasendorf at the Livingstons' home.
Former Peregrine clients objected to Wasendorf's release as they struggle to make do without the money stolen from their accounts.
Doug McClelland, who runs Plains Commodities, a one-man brokerage that had about $500,000 in accounts at Peregrine, predicted Wasendorf might try to end his life again after being released.
"I'd rather see him do the jail time," McClelland said.
The judge acknowledged in his order that former customers had lost millions of dollars, but said that "the issue before me at this time is not one of punishment."
Instead, he said, the issue was whether he could reasonably ensure Wasendorf's appearance at future proceedings.
Wasendorf partially owns a construction company in Romania, raising some concerns he could attempt to flea overseas.
The judge, citing a Reuters article, said in the order that Wasendorf's business partners there were attempting to distance themselves from Wasendorf.
The amount of money customers are missing has been in question since Wasendorf claimed in a suicide confession that he bilked them out of more than $100 million.
The Commodity Futures Trading Commission has filed a lawsuit against Wasendorf and his firm, saying the CEO misappropriated more than $200 million in customer funds over several years.
Federal prosecutors said in their plea agreement with Wasendorf that they would determine the final amount at his sentencing.
Wasendorf pulled off his fraud by pretending to make large deposits into an account at U.S. Bank and providing fabricated deposit receipts to Peregrine's accounting department, according to new details contained in the signed plea agreement, which was made public on Thursday.
He then forged monthly account statements to include the fake deposits and correspondingly inflated balances.
Wasendorf also secretly transferred money out of the U.S. Bank account and eliminated the deductions when fabricating bank statements for use by Peregrine's accounting department.
"It adds a lot of complexity to the fraud to do it on both sides," said James Koutoulas, a former Peregrine customer who has been advocating for clients as a head of the Commodity Customer Coalition.
Wasendorf has cooperated in the investigation into the missing money and identification of victims and agreed that "full restitution will be ordered" regardless of his financial resources, according to the plea deal.
He also agreed to give up the profits from any publicity about his story, such as books or movies, to the government for distribution to customers or creditors. (Reporting by Tom Polansek; Editing by Carol Bishopric, Leslie Gevirtz, Gary Hill)