Investigators with the IRS and FBI say a Pitkin County couple swindled about $1.5 million from investors in a CBD company, illegally laundered it and then stole more than $200,000 from the federal government through fraudulent Paycheck Protection Program loans.
Ronald Wallace, 65, and Stace Wallace, 67, were indicted by a federal grand jury on June 22. The Aspen area residents are charged with 31 counts of money laundering, three counts of bank fraud and one count of conducting a monetary transaction in criminally derived property.
Ronald Wallace, who has a criminal past, also faces nine counts of wire fraud. He pleaded guilty in 2005 to one count of money laundering, four counts of wire fraud and two counts of mail fraud for a Ponzi scheme that ripped off dozens of wine connoisseurs, according to past media reports. He was sentenced to probation in 2007 and ordered to repay $11.2 million.
Both Wallaces have pleaded not guilty to the current charges. Their attorneys did not respond to requests for comment. Each bank fraud count could result in a maximum sentence of 30 years in prison. For wire fraud, the maximum is 20 years and for money laundering it is 10 years.
Federal prosecutors allege Ronald Wallace — “by means of materially false and fraudulent pretenses, representations, and promises” — raised $1.5 million from investors between 2014 and 2019 for a company that made and sold CBD. The indictment doesn’t name the company.
He and Stace Wallace are accused of then laundering the money between various bank accounts and LLCs “to conceal or disguise” the money allegedly taken from investors.
In the three bank fraud counts, the Wallaces are accused of submitting three “false and misleading” PPP loan applications in the name of NATURLFC Inc., according to the indictment, which doesn’t describe what was false or misleading in them. The loans totaled $233,546.
In the one count of conducting a monetary transaction in criminally derived property, the couple is accused of wiring more than $10,000 of their illegal proceeds from a bank account for NATURLFX to a trust account for a law firm, identified in the indictment by the initials D.W.
The Wallaces were released on bond Monday. They surrendered their passports and were ordered to not leave Colorado without permission from U.S. Magistrate Judge Nina Wang. Ronald Wallace was also ordered to not possess guns, drink to excess or use marijuana.
Wallace avoided prison during his sentencing in 2007 due to his health. Prosecutors pushed for a prison sentence between seven and nine years but attorneys for Wallace, then 49, argued his Crohn’s disease put him at risk of an early death behind bars. A California judge agreed.