Wine swindler pledges payback | AspenTimes.com
YOUR AD HERE »

Wine swindler pledges payback

Ronald Wallace has five years to pay in restitution what few people earn in a lifetime – $11 million. Because of an order a federal judge issued two weeks ago today, the Basalt resident has until March 2012 to pay back his victims if he wants to avoid any interest.In an interview last week, the 49-year-old Wallace said making his victims whole will be his chief priority. “My situation is this: I am focused on one thing, and one thing only. And that is to bust my butt to pay restitution as fast as humanly possible,” said Wallace, whose two-year house arrest sentence begins in March. Some of his victims, however, aren’t counting on the funds and believe that Wallace’s insistence that he will pay them back mirrors what he told them in the past. If the 49-year-old Wallace, who solicited international clients and traveled around the world to attract them, could not keep his promises then, there’s no reason to believe he will now, they said. “[Wallace] made a lot of promises, but nothing materialized,” John Wocher wrote in an e-mail to The Aspen Times. Wocher, who lives in Japan, said Wallace fleeced him out of $4,000 – money he doesn’t expect to recoup.Wocher is among a slew of people who gave money to Wallace’s online and mail-order business, Rare LLC, which sold specialized wines such as Bordeaux. He boasted a stable of high-profile clients, including Guess Inc. co-founders Paul and Maurice Marciano, and Philadelphia Phillies pitcher Jamie Moyer.But from 1999 to 2003, U.S. prosecutors allege, 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. All told, he bilked wine connoisseurs out of $13 million, they said.Prosecutors likened Wallace’s tactics to a Ponzi scheme – which he engineered by using money new customers paid to him to buy wines for previous clients. The scam eventually unraveled, and Wallace was indicted in federal court in 2004. In June 2005 he pleaded guilty to one count of money laundering, four counts of wire fraud and two counts of mail fraud.No prison timeOn Feb. 12, U.S. District Judge Consuelo Marshall, to the delight of Wallace and the chagrin of many of his victims, handed down a sentence of five years of probation and two years of confinement at his Elk Run home. He also must pay $11.2 million in restitution.The judge cited Wallace’s health as the reason for avoiding prison time. Prosecutors unsuccessfully lobbied for seven to nine years behind bars.In last week’s interview, Wallace praised the judge who sentenced him and apologized to the customers he bilked. “I’m very fortunate to have a job that pays the kind of money so I can pay $11 million over the next five years,” Wallace said. “And I’m very sorry that clients of Rare LLC didn’t get the wines delivered to them. I take full responsibility for what happened to them.”Wallace would not say how he is making the money or identify his employer, but said it is a builder of “green homes.” However, around town he has handed out business cards for Aspen Devco – with his name on them. Aspen Devco develops green spec homes and is run by Randy Egan, who did not return a phone message seeking comment last week.”I have a good job,” Wallace said. “I get paid well. I work closely with the architects and I get a percentage of the profits from projects, and the bulk of that money will go to restitution.”According to court papers arguing for a lenient sentence, “Mr. Wallace is currently employed in a position from which he can make significant restitution over a five-year period of probation.”But a letter to Marshall dated Feb. 20 – eight days after Wallace’s sentencing – was critical of Wallace’s home arrest and probation. Wocher’s letter questioned Wallace’s ability to pay the restitution in full – never mind over five years.”Your Honor, I find it incredible that Ron Wallace, a convicted felon, will now earn enough money to make restitution to his victims,” Wocher wrote. “If he makes $250,000 a year, it will take him 20 years to pay back the money he swindled from them, and I find it inexplicable that you would order him to pay back the victims when you must know it is a statistical impossibility. If Ron Wallace was sentenced to jail, where I and all of the victims believe he should be, I would waive my restitution, since I know (and you do too, I think), I will not see one dollar of my money.”Aspen lawyer John Beatty, who filed a number of lawsuits in Pitkin County District Court before Wallace’s criminal indictment, said the victims he represented “were amazed he dodged jail time.””They are upset he didn’t get jail time, and how he’s going to pay everyone back, I guess that remains to be seen,” Beatty said last week.The sick defenseFor years Wallace has suffered from Crohn’s disease, a gastrointestinal condition that causes chronic pain, anemia and internal bleeding. His attorney, Marilyn Bednarski of Pasadena, Calif., argued in court papers that he “is in the top worst 1 percent of all [Crohn’s] sufferers.” One physician, Dr. Paul Miskovitz, called Wallace a “medical time bomb.”And if Wallace were to spend a substantial time in federal prison, his doctors and lawyer argued, he could die. Bednarski also claimed that Wallace’s medical treatment can cost up to $70,000 to $80,000 per year, something the Bureau of Prisons could not pay.”Skyrocketing healthcare for a burgeoning prison population serving longer sentences and by a growing number of sicker and older inmates is a huge problem for the [Bureau of Prisons],” Bednarski argued in court documents. Bednarski also referred to Wallace’s original incarceration in October 2004, after his original arrest. The time he spent in jail took its toll on him because of his disease, she wrote.”His lapse of care and medications caused a severe flare up of his disease, a condition which to this day had lasting effect,” she wrote. Wallace’s red blood-cell count went down, as did his iron, and his B-12 became “dangerously low,” Bednarski argued.”These are some of the several penalties he has already suffered as a result of the arrest over these next months,” she wrote.In arguing for prison time, prosecutors said that the Rochester, Minn., prison where Wallace would have stayed is just a few miles away from the world-renowned Mayo Clinic. If medical emergencies arose, he could receive proper care there, they said.”It’s a shame. I think the record reflected that the Bureau of Prisons could provide the necessary medical treatment,” federal prosecutor Matthew Sloan said after the sentencing hearing.Wallace, meanwhile, said the media and government painted an unfair picture of him. The company he works for owns the BMW he drives, he said. “I don’t own a car,” he said. “The company I work for has four or five vehicles, and the one I drive happens to be a BMW.”He also said it’s not fair to criticize him for skiing every once in a while. He said he must exercise to increase his red blood-cell count.”I have half of the blood as a normal person,” he said. “I have to get my red blood cells up, and I have to exercise to do it, and in the last year I have only skied nine times.”Wallace also said that when he does ski it hardly comes with ease.”If I ski Buttermilk I have to stop at least eight to 10 times, from the top to the bottom,” he said. “But I have to get some sort of exercise in.”Rick Carroll can be reached at rcarroll@aspentimes.com


Support Local Journalism

Support Local Journalism

Readers around Aspen and Snowmass Village make the Aspen Times’ work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.

Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.

Each donation will be used exclusively for the development and creation of increased news coverage.

 

Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.

User Legend: iconModerator iconTrusted User