Nearly $20 million will go unpaid in Basalt wine seller’s bankruptcy | AspenTimes.com

Nearly $20 million will go unpaid in Basalt wine seller’s bankruptcy

Rick CarrollThe Aspen TimesAspen CO Colorado

BASALT – The books have been closed on a defunct Basalt-based business that went bankrupt more than eight years ago in the wake of a wine-selling scam that cheated investors out of millions of dollars.Court records show the Chapter 7 bankruptcy of Rare LLC was discharged April 27, and nearly $20 million in creditors’ claims won’t be satisfied. Nineteen creditors have addresses listed in the Aspen-Snowmass and Basalt areas.Only the administrative costs associated with the bankruptcy – totaling $35,593 – were paid out, bankruptcy records show. Rare LLC was the brainchild of Basalt resident Ronald Wallace. As a mail-order wine business, the company specialized in selling futures from coveted regions such as Bordeaux. From 1999 to 2003, U.S. prosecutors said, Wallace took money from customers for wine futures he mostly failed to deliver. Instead, he used the money to buy a BMW, remodel his home, join the Roaring Fork Club and jet around the world, prosecutors said.Wallace, as the company head, was convicted on federal charges that he bilked connoisseurs out of $13 million, and was ordered, as part of his sentencing, to refund his clients $11 million.Wallace’s sentence, handed down Feb. 12, 2007, also included five years of probation and two years of house arrest. But in June 2010, more than three years after the original sentence handed to Wallace, he was sentenced to another nine months in the U.S. Bureau of Prisons and 27 months of supervised release for violation of five provisions of his probation – failure to pay restitution, failure to provide his probation officer with federal and state income tax returns, failure to maintain employment, failure to submit monthly report forms, and failure to report to his probation officer. Wallace’s criminal attorney, Lynn Pierce of Lakewood, Colo., could not be reached for comment Friday. But a court motion filed April 20 in Wallace’s criminal case, granted by U.S. District Judge Christine Arguello on April 22, sought permission to not require Wallace to submit to random drug testing, a term of his probation, because he has Crohn’s disease and takes medications “which cause severe dehydration making it virtually impossible for Mr. Wallace to produce a urine specimen for testing.”The bankruptcy, meanwhile, approved by Trustee Joseph G. Rosania, identifies all of Rare LLC’s creditors who filed claims seeking money from the Rare estate. None of them will be paid. Among them are Maurice Marciano, co-founder of Guess? Inc., who made separate claims for $1,468,545 and $1,724,965. Another Guess? co-founder, Paul Marciano, made claims of $378,118 and $750,891. Former Microsoft executive Scott Oki also made a claim seeking just over $1 million. Other high-profile clients who won’t see a dime include ESPN sports broadcaster Chris Fowler ($22,388) and baseball pitcher Jamie Moyer’s nonprofit Moyer Foundation ($13,275). Locally, Aspen attorney John Beatty filed a claim for $234,259, as did Aspen law firm Garfield & Hecht, for $21,953. Additionally, Aspen businesses such as Labor Source ($12,845), Mountain Temp Services ($5,311) and Grassroots Community Television ($500) will see unsatisfied claims, along with Pitkin County Clerk and Recorder’s Office, which filed a claim for $686, according to bankruptcy records. Rare filed for Chapter 11 bankruptcy protection on March 17, 2003. The bankruptcy was converted to Chapter 7 (liquidation) on May 14, 2004. rcarroll@aspentimes.com


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