Wine scammer avoids prison time, must pay $11.2 million
A federal judge spared Basalt resident Ronald Wallace a prison sentence Monday, but still ordered him to pay $11.2 million in restitution toward victims of his wine scam.Wallace, who was arrested in 2003, also was sentenced to five years of probation and two years of home detention (house arrest), according to Thom Mrozek, spokesman for U.S. District Court in Los Angeles.Judge Consuelo Marshall cited Wallace’s poor health for keeping him out of prison, Mrozek said. Wallace has Crohn’s disease, and his attorney argued at Monday’s hearing, in Los Angeles, that imprisonment would jeopardize his health. Crohn’s disease is an inflammation of the colon that causes internal bleeding and anemia.But prosecutors argued that Wallace’s health wasn’t as dire as his attorney suggested. They sought a prison sentence ranging between seven and nine years.”Mr. Wallace is hardy enough to play golf, to ski … to go biking, but he’s not well enough to go to prison? That simply can’t be true,” federal prosecutor Matthew Sloan told the court, according to a report from The Associated Press. Marshall, however, said he was not convinced the prison system could provide Wallace with appropriate treatment, the AP reported. “I’m really sympathetic to the victims … I feel really bad,” the AP quoted Wallace as saying. “I’m looking forward to making the restitution and having the opportunity to do that.”Not everyone is convinced. Aspen attorney Bob Beatty, who sued Wallace in Pitkin County District Court on behalf of numerous wine customers, said his clients have yet to receive any money. “There are a huge number of people who have claims against him,” Beatty said Monday. “No one has gotten anything.”Wallace also has been a common sight in Aspen recently, dining at trendy restaurants and driving his BMW.But in court papers, Wallace’s attorney, Marilyn Bednarski, argued that he has a steady job and that jail time would hamper his ability to pay anyone back. Wallace pleaded guilty in June 2005 to one count of money laundering, four counts of wire fraud and two counts of mail fraud – all in connection to a so-called Ponzi scheme that ripped off dozens of wine connoisseurs. Among his clients were Guess? Inc. co-founders Paul and Maurice Marciano, ESPN “College GameDay” host Chris Fowler, movie producer Arthur Sarkissian and Philadelphia Phillies pitcher Jamie Moyer, according to court papers. According to court papers, Wallace marketed and sold such “future” vintage wines as Lafite and Cheval Blanc. The futures allowed customers to buy vintage wines before they had been bottled or released, but on many occasions Wallace never delivered the wine. Through his company, Rare LLC, he sold the wine online and through mail orders.But instead of buying and delivering the wines, he pocketed the money to fund a lifestyle that included the BMW, membership to the Roaring Fork Club and a remodeling job on his home, prosecutors alleged.Before his arrest, there were signs that Wallace’s wine business was crumbling. Customers said they paid thousands of dollars for wines they didn’t receive and filed numerous lawsuits in Pitkin County District Court. Rare LLC subsequently went belly up and bankrupt, leaving creditors in the dark.The lawsuits, Beatty said, are still pending. “A lot of people trusted Ron,” Beatty said. “And when that trust is breached, people get upset. It was about the money, but it was also the principle.”Rick Carroll’s e-mail address is firstname.lastname@example.org
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