Government's Sentencing Statement — USA v. Wallace (Dkt. 120, D. Colo.)
Summary
The Government's Sentencing Statement for Defendant Ronald Wallace in United States of America v. Ronald Philip Wallace, Criminal Case No. 22-cr-00211-PAB, in the U.S. District Court for the District of Colorado, filed April 11, 2025 as Document 120. It states that the Presentence Report calculates a range of 30 to 37 months and recommends 30 months, while the government calculates 24 to 30 months and recommends the low end of whichever range the Court applies. The government argues that the defendant deceived investors in cannabidiol companies out of more than $300,000 and defrauded the Small Business Administration of almost a quarter of a million dollars through false payroll and employee figures for NaturlFx Inc. It opposes the defense request for a time-served sentence and cites a prior fraud conviction. It is signed by Assistant U.S. Attorneys Tim Neff and Nicole C. Cassidy.
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“Government's Sentencing Statement — USA v. Wallace (Dkt. 120, D. Colo.).”
Original at ecf.cod.uscourts.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/government-s-sentencing-statement-usa-v-wallace-dkt-120-d-colo-509e6b73c9/
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Case No. 1:22-cr-00211-PAB Document 120 filed 04/11/25 USDC Colorado pg 1
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Criminal Case No. 22-cr-00211-PAB
UNITED STATES OF AMERICA,
Plaintiff,
v.
1. RONALD PHILIP WALLACE,
Defendant.
GOVERNMENT’S SENTENCING STATEMENT FOR DEFENDANT
RONALD WALLACE
The United States of America, by and through J. Bishop Grewell, Acting United
States Attorney for the District of Colorado, Tim R. Neff and Nicole C. Cassidy,
Assistant United States Attorneys, files this Sentencing Statement for Defendant Ronald
Wallace.
Background and Potential Sentencing Ranges
The Presentence Report (“PSR”) calculates that the applicable guideline range
for the Defendant’s offense is 30 to 37 months imprisonment, based on an offense level
of 18 and criminal history category 2. PSR, Exhibit A, [#105-1]. The PSR ultimately
recommends a 30 month imprisonment sentence (concurrent as to each count) followed
by 5 years of supervised release. Id.
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Alternatively, the Government calculates that the applicable guideline range
should be 24 to 30 months of imprisonment (which assumes a final offense level of 161
and a criminal history category of II).
Accordingly, the Government recommends (consistent with the Plea Agreement)
that the Court sentence the Defendant “to the low end of the guideline range ultimately
calculated by the Court.” PSR, ¶ 3, Plea Agreement at 3 [#97]. If the Court determines
that the PSR’s recommended higher guideline range is applicable, the Government’s
recommendation is for a 30 month imprisonment sentence (i.e., the low end of such
range). Whereas, if the lower range as urged by the Government is determined by the
Court to be applicable, the Government recommends a 24 month imprisonment
sentence.
The Defendant filed a Motion for Departure and Non-Guideline (Variant)
Sentence, in which he seeks a sentence to time served (one day here) and a term of
supervised release. [#109]. By separate pleading, the Government intends to file its
objection and opposition to the Defendant’s request for essentially a non-custodial
sentence.
In support of its sentencing position, the Government states as follows:
1 When making its guideline calculation that the final offense level should be 16, the
Government recognizes that the Court would first have to sustain the Government’s
separately filed Objection to the PSR [#108] contesting the total loss calculation in the
case.
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Sentencing Factors – 18 U.S.C. § 3553(a)
Nature of the Offense
The PSR provides a thorough and detailed outline of the overall nature of the two
offenses of conviction – (1) wire fraud and aiding and abetting, and (2) bank fraud and
aiding and abetting. PSR, #105, ¶¶ 9-36. As noted in the PSR, the underlying offense
conduct involved two discreet offenses with two separate sets of victims.
First, the Defendant deceived three investors out of funds in excess of $300,000,
involving investments into the Defendant’s companies producing cannabidiol products.
As it relates to victim T.H., the Defendant exploited and betrayed a personal relationship
in the course of defrauding him. PSR, ¶ 31. T.H. recounted that he first met the
Defendant while both of their sons were participating in the Aspen Valley Ski Club. Id.
Later, after T.H. had fallen on hard times because of the accumulation of large debt due
to cancer treatments for his dying wife, the Defendant persuaded T.H. to invest in his
companies based on promises of high returns and false inducements. Victim M.C. was
referred to the Defendant through friends. PSR, ¶ 32. The Defendant later swindled
him out of over $50,000 when M.C. was shown paperwork containing false information
regarding inventory and account receivables in the Defendant’s companies. Id. Finally,
victim S.C. was duped into investing with the Defendant after meeting him through a
mutual friend. PSR, ¶ 26. S.C. began working for the Defendant for a short time after
meeting him. Unfortunately, S.C. was persuaded by the Defendant to refinance his
home to pay for his investment. Id. S.C. later suffered a loss of $113,000 because of
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the mistaken trust which he placed in the Defendant. Id. As it relates to each of these
victims, the Defendant took advantage of his personal connection and direct relationship
with each victim for his own personal gain. Such conduct warrants a sentence that
accounts for the betrayal of such friendship and trust.
Second, the Defendant defrauded the Small Business Administration (SBA) of
almost a quarter of a million dollars through his lies and deceit. In the course of
obtaining COVID-19 loan funds, the Defendant made false statements regarding the
monthly payroll and number of employees connected to his company, NaturlFx Inc.
PSR, ¶ 18. He later misused the emergency funds which were intended for business
expenses, instead using such funds for his personal benefit and other business
ventures. Id. At a time when the SBA offered a benevolent program intended to help
struggling businesses during a time of crisis, the Defendant chose to abuse the
government and participating banks, and let his avarice take control. Ultimately, the
SBA (i.e. – the taxpayer) was deprived of these funds, and it is unlikely to recoup such
losses given the Defendant’s indigency and dim prospects for employment.
History and Characteristics of the Defendant
The Defendant does not appear the Court as a first offender. As detailed in the
PSR, the Defendant was convicted in 2004 in California for the offenses of mail fraud,
wire fraud and money laundering. PSR, ¶ 61. The Defendant’s earlier fraud scheme
involved offering investors a chance to purchase wine futures through his company
Rare Wines LLC. Id. However, in the course of committing this fraud scheme, the
Defendant never used his investors funds to secure large allocations of top wines in
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France as promised. Id. The Defendant in fact did not own or possess the bottles of
wine he purportedly sold to investors. Id. The PSR states that: “By March of 2003, the
defendant’s fraudulent scheme collapsed” and “investigation later revealed the
defendant’s scheme incurred 162 victims who in total lost $14,820,620.” Id. After
having his probation and supervised release revoked, the supervising Court sentenced
the Defendant on April 16, 2012, to 63 months in prison. Id. According to court records,
at the time the Defendant was sentenced to prison after final revocation, he had only
paid $127,102 towards his final restitution obligation. Id.
The parallels between the Defendant’s earlier offense and present ones are
striking. First, both offenses involve wire fraud. Second, both offenses involved
deceiving investors (albeit significant less in the present case) through false promises
and misrepresentations. Third, both offenses involved the purported ownership stake in
companies supposedly generating high rates of return and supplying an ingestible
product (wine and cannabidiol). Finally, both offenses involved the Defendant soliciting
funds from investors for one stated purpose but then using victims’ funds for another
one – his own personal wealth and benefit.
Here, one additional fact is worth noting about the Defendant’s prior sentence
from California as it relates to the present offense. According to the PSR, the
Defendant was released from prison on December 4, 2015. PSR, ¶ 61. Despite
recently serving a federal prison sentence, the Defendant returned to his deceitful ways.
Indeed, approximately two short years later sometime in 2017, he began orchestrating
yet another investment fraud scheme in the present case. PSR, ¶ 9. Then, a few years
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later, he committed his COVID-19 loan fraud scheme during a global pandemic. To the
extent the Defendant now suggests he has reformed and learned his lesson, his quick
return to crime following his first conviction suggests he did not get the message the first
time that federal fraud schemes result in prison time.
In common parlance, “this is not the Defendant’s first rodeo.” The Defendant is a
repeat fraudster and his decision to once again pursue this harmful course of conduct
warrants imprisonment.
Promote Respect for Law / Just Punishment / Adequate Deterrence / Protect Public
Here, it’s important that the sentence adequately punish the Defendant and
provide the message that federal law carries meaningful imprisonment sanctions for fraud
offenses. While no one was physically injured from a violent crime, the lasting impact of
this type of financial fraud and connected conduct is nonetheless detrimental for the
victims. As a result of this type of offense, victims often lose trust in others and are stuck
attempting to recover from their financial losses for years to come. A sentence to
imprisonment as called for under the guidelines months will help some of the victims find
some measure of justice and hopefully restore such victims’ faith in the court system.
A custodial sentence is necessary to ensure that others tempted to engage in
similar conduct are deterred from doing so. As noted above, the Defendant engaged in
two separate fraud schemes involving both individual investors and a government
program, resulting in an aggregate loss of over $500,000. The purposes of general
deterrence can be satisfied when others are reminded such conduct results in
meaningful imprisonment.
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Specific deterrence is also an important factor when considering the
Defendant’s pattern of behavior. By imposing imprisonment, the Court will also prevent
the Defendant from conducting a similar offense in the immediate future given his
incarceration. Here, the Defendant was previously convicted of a fraud offense in 2004
and was generously given a probationary sentence by the Court in California. However,
after repeated efforts by the probation office and the Court in California to obtain
compliance with the conditions of supervision, the Defendant was eventually sent to
prison for a combined total of 63 months. PSR, ¶ 61. While previously on supervision,
the Defendant showed a pattern of non-compliance which involved among other things:
failure to pay his monthly restitution; failure to report his salary, income and tax returns;
failure to submit monthly reports; failure to follow the instructions of his probation officer;
falsifying monthly written supervision reports; making false statements to his probation
officer; and failing to report as directed. Id. The Defendant’s pattern of behavior while
on supervision speaks for itself. An imprisonment sentence is warranted not only to
punish the Defendant but to also ensure that he understands from the outset that he
must comply with all Court requirements or else face additional prison time.
Imposing an imprisonment sentence will further ensure that members of the
public are protected from any further crimes committed by the Defendant.
Provide Defendant Needed Educational Training, Medical Treatment
or Correctional Treatment
The PSR indicates that the Defendant has a past history involving alcohol abuse
and some illegal drug consumption in his younger years. PSR, ¶¶ 87-92. The
Defendant completed the Residential Drug Abuse Program (RDAP) while in federal
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prison from his earlier conviction. PSR, ¶ 91. The Defendant self-reported that he does
not believe that he has an alcohol or drug problem. PSR, ¶ 92. The Defendant does
not have any apparent mental or emotional health issues. PSR, ¶¶ 87-92.
The Defendant has a high school diploma and attended college but does not
have a degree. PSR, ¶¶ 93-94. The Defendant is currently receiving social security
and is working as an unpaid consultant for a private company in Basalt, Colorado.
PSR, ¶ 97. The Defendant has held a variety of other jobs during the past ten years.
PSR, ¶¶ 97-100.
The PSR does not indicate that the Defendant has unique needs related to
educational or vocational training, or correctional treatment.
The PSR does indicate that the Defendant has various physical health
conditions, most notably Crohn’s disease. PSR, ¶ 79. The Defendant has had
numerous surgeries related to this condition and he is currently taking multiple
medications related to this condition and other health ailments.
The Defendant has requested a variance sentence to supervised release based
on his health condition, stating among other things that a “medical facility, would pose
an untenable risk to his health due to the nature of his condition [and] the rigid structure
of BOP’s healthcare system…” Def’s Mot. for Variance at 5 [#109]. The Government
opposes such a variance request and will be filing its objection by separate pleading.
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The Government opposes any downward variance based on the above factors.
The Bureau of Prisons is equipped to handle the defendant’s medical conditions.
According to the bop.gov website2,
The Bureau’s professional staff provides essential medical, dental, and
mental health (psychiatric) services in a manner consistent with
accepted community standards for a correctional environment. The
Bureau uses licensed and credentialed health care providers in
ambulatory care settings, that are supported by community consultants
and specialists. For adults in custody with chronic or acute medical
conditions, the Bureau operates seven (7) medical referral centers
providing advanced care.
To be clear, the Government does not suggest that the Defendant’s physical
health conditions are not genuine, as they are in fact documented in the PSR.
However, the Government does oppose the Defendant’s argument that these factors
justify a substantial reduction in the Defendant’s final sentence. Indeed, there is no
indication in the PSR that the Defendant is terminally ill or suffering from an untreatable
condition. On the contrary, it appears the Defendant’s condition warrants medical
supervision, treatment, and medication, which he will be able to obtain while serving a
custodial sentence. The BOP remains uniquely positioned and primarily responsible for
ensuring adequate medical treatment, housing and handling of federal inmates. Put
simply, the Defendant’s health factors are not so exceptional so as to warrant downward
variance recommended in the PSR. As with any other defendants sentenced to
imprisonment, the BOP is charged with (and presumed capable of addressing) the
2 https://www.bop.gov/inmates/custody_and_care/medical_care.jsp
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Defendant’s unique medical needs and conditions. As necessary, BOP can and will
make any necessary medical referrals or accommodation to address these matters.
Need to Avoid Unwarranted Sentencing Disparities Among Defendants
The Government is unaware of any reason that the recommended sentence
would result in any unwarranted sentence disparities with other similarly situated
defendants.
Need to Provide Restitution to Any Victims of the Offense
As noted above, there are a number of victims who suffered substantial
pecuniary harm as a result of the Defendant’s fraud scheme. The Defendant will be
responsible for paying restitution to these individual investors along with the SBA. PSR,
Exhibit A, [#105-1]. Undoubtedly, receiving any restitution payments as soon as
possible would certainly be of a benefit to such victims. Nonetheless, the need for the
victims to be recompensed must be balanced against the other important factors set
forth in § 3553(a) such as ensuring just punishment and the protection of the public.
Unfortunately, it does not appear from the Defendant’s financial condition that he will be
in a position to make any meaningful restitution payments in the near future given that
he is indigent, has virtually no assets, and currently has an outstanding federal
judgment owing of approximately $11 million to previous victims. PSR, ¶ 103.
Other Issue – Standard Condition Regarding Employment
Finally, the Defendant objects to the PSR’s recommendation that he adhere to
the Probation Office’s standard condition of supervision that he be obligated to work full
time and continue to seek employment when not employed. Def’s Objection to PSR at
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4 [#107]. In his objection, the Defendant notes that he is of full retirement age,
currently receiving Social Security, and has a chronic illness. Id.
As noted above, the Government is mindful that the Defendant has a serious
medical condition and that he is 68 years old. Nevertheless, the Government asserts
that the Probation Office will be in the best position to assess the Defendant’s fitness,
ability, and competence to maintain employment once he is released from prison at a
future date. Should it be determined at that later juncture that the Defendant cannot
work for various reasons, the Probation Office -- based on its individualized assessment
at such later time -- can seek modification (or removal) of this condition by the Court if
warranted. However, at this time, it is premature to remove such a requirement.
Indeed, the Defendant effectively stole over a half a million dollars from victims
during the present fraud scheme and he still owes another approximately $11 million to
victims from his earlier case. To the extent the Defendant is capable of working and
generating moderate income, he should do so. Any amount of restitution payments to
the victims – even if small – will be significant to the victims because it will represent
some measure of justice and accountability for the Defendant. Requiring the Defendant
to maintain employment while on supervision is an important condition for achieving
such an outcome.
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WHEREFORE, the Government requests that the Court sentence the Defendant
as recommended above.
Respectfully submitted this 11th day of April, 2025.
J. BISHOP GREWELL
Acting United States Attorney
By: s/ Tim Neff
Tim Neff
Assistant U.S. Attorney
United States Attorney’s Office
1801 California Street, Suite 1600
Denver, Colorado 80202
Telephone: (303) 454-0367
Fax: (303) 454-0401
Email: Tim.Neff@usdoj.gov
Attorney for Government
By: s/ Nicole C. Cassidy
Nicole C. Cassidy
Assistant United States Attorney
United States Attorney’s Office
1801 California Street, Suite 1600
Denver, Colorado 80202
Telephone: (303) 454-0100
Email: nicole.cassidy@usdoj.gov
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CERTIFICATE OF SERVICE
I certify that on this 11th day of April, 2025, I electronically filed the foregoing
GOVERNMENT’S SENTENCING STATEMENT FOR DEFENDANT RONALD
WALLACE with the Clerk of the Court using the CM/ECF system which will send
notification of such filing to all counsel of record in this case.
By: s/Maureen Carle
Legal Administrative Specialist
United States Attorney=s Office
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