ROARING FORK BROADCASTING COMPANY
A Basalt man pleaded guilty last week to two federal fraud charges associated with pandemic relief funds he collected and investments he received through his CBD business operations.
In a plea deal made with the government, Ronald Wallace, 67, agreed to pay more than $700,000 in restitution, up to a $1 million fine to the IRS and serve up the maximum 20- and 30-year prison sentences. Wallace also would face up to three years of supervision after his release.
On a less severe charge, his wife, Stace Wallace, pleaded guilty to one charge of willfully failing to file tax returns with the IRS from 2017 through 2019. She is liable to the IRS for $7,759 in restitution as well as a fine of up to $100,000.
The agreements also provide that they forfeit their assets, with proceeds going toward restitution.
The couple could not be reached on Friday and declined comment when previously contacted during earlier stages of this story. Court records shed some details of the plea agreement.
“I want to plead guilty and have no mental reservations about my decision,” each Wallace said in separate written statements entered on Thursday in advance of the day’s plea hearing held in the U.S. District Court of Colorado in Denver; virtual access was not immediately accessible to members of the media (access would have required a motion requesting a judge’s permission, a court clerk said).
The agreements were entered on Thursday in the U.S. District Court of Denver ahead of a change-of-plea hearing for the couple later that day.
A two-hour sentencing hearing is scheduled at 2:30 p.m. Feb. 28 before Chief Judge Philip A. Brimmer, who accepted the change-of-pleas. The plea agreements also require the judge’s authorization, which would be based in part on a pre-sentence investigation report that has not been completed, according to court records.
Last week’s pleas came more than two years after a federal grand jury indicted the couple in June 2022 on dozens of criminal charges.
Ronald Wallace was indicted on 44 offenses — 31 counts of money laundering, three counts of bank fraud and one count of conducting a monetary transaction in criminally derived property greater than $10,000.
The grand jury indicted Stace Wallace on 35 charges — 31 counts of money laundering, three counts of bank fraud and one count of conducting a monetary transaction in criminally derived property greater than $10,000.
The U.S. government issued a news release about their arrests on June 27, 2022, stating that “it is alleged Wallace made false and misleading statements to obtain nearly $1.5 million in investments from individuals for the purpose of funding, production, and marketing of CBD products. Additionally, it is alleged the couple worked together to obtain over $200,000 in COVID-19 Paycheck Protection Program funds through the inclusion of false information on the loan applications.”
Both Wallaces pleaded not guilty at the time of their arrests; multiple trial dates were postponed leading up to their decision to change their pleas to guilty.
The plea agreement introduced last week, however, noted that the government’s case was not as strong as it originally believed it to be, such as whether Ronald Wallace had specifically intended to mislead the investors.
“The government respectfully submits that it cannot meet its burden of proof beyond a reasonable doubt that the defendant acted with the specific intent to defraud with respect to these investors or that the defendant made materially false statements to these investors that induced their investments into these CBD companies,” the agreement said.
Even so, Ronald Wallace admitted to committing wire fraud when he conducted interstate commerce by accepting investors’ deposits into accounts he controlled.
The wire activity began in 2017 and the PPP financial crimes went on from May 2020 through February 2021, according to the plea agreement.
Ronald Wallace has run afoul of federal law in the past. A federal judge ordered him in 2007 to pay $11.2 million in restitution to victims who paid him for wine futures that they never received. He received five years of probation and three years of supervised release for committing mail fraud, wire fraud and engaging in an unlawful monetary transaction.
The government revoked his probation in 2009 for his failure to pay restitution and not complying with probation. Wallace violated probation multiple times and in April 2012, he was sentenced to 63 months behind bars. He was granted early release in December 2015, according to the Federal Bureau of Prisons.
Wallace said in the signed statement that “I know that there is no parole in the federal system and that I will be required to serve the entire sentence of imprisonment which may be imposed in my case, reduced only by such good time and/or program allowances as may be set by Congress and applied by the Bureau of Prisons.”
Lawyer Richard Banta, who represents Ronald Wallace, could not be immediately reached for comment Friday.