Indictment — United States v. Ronald Philip Wallace and Stace Yater Wallace, District of Colorado (Document 1)
Summary
A grand jury Indictment in United States of America v. Ronald Philip Wallace and Stace Yater Wallace, Case No. 22-CR-0211-PAB, in the U.S. District Court for the District of Colorado, filed June 22, 2022 as Document 1. Counts 1 - 9 charge Ronald Philip Wallace with wire fraud over investor funds sought for companies producing CBD products, and Counts 10-40 charge both defendants with money laundering under Title 18, United States Code, Sections 1956(a)(1)(B)(i) and 2. Counts 41 through 43 charge bank fraud under Sections 1344 and 2 over PPP loan applications for NATURLFX, Inc. to Vectra Bank of Colorado, which funded a $65,200 loan, a $54,854 second draw and a $113,492 loan. Count 44 charges a monetary transaction over $10,000.00 in criminally derived property under Section 1957. It is signed by Assistant U.S. Attorney Robert Brown.
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Cite this document
“Indictment — United States v. Ronald Philip Wallace and Stace Yater Wallace, District of Colorado (Document 1).”
Original at ecf.cod.uscourts.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/indictment-usa-v-wallace-dkt-1-d-colo-4038920694/
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Case No. 1:22-cr-00211-PAB Document 1 filed 06/22/22 USDC Colorado pg 1
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Case No. 22-CR-0211-PAB
UNITED STATES OF AMERICA,
Plaintiff,
v.
1. RONALD PHILIP WALLACE and
2. STACE YATER WALLACE,
Defendants.
INDICTMENT
The Grand Jury charges:
COUNTS 1 - 9
1. Between September 2014 through August 2019, defendant RONALD
PHILIP WALLACE devised and intended to devise a scheme to defraud and to obtain
money by means of materially false and fraudulent pretenses, representations, and
promises.
2. As part of the scheme, RONALD PHILIP WALLACE sought investments
from individuals as a means of capitalizing companies with which he was associated
which were involved in producing and selling CBD products. 1
3. As a part of the scheme RONALD PHILIP WALLACE provided potential
investors with false or misleading information for the purpose of inducing them to
1
CBD is a reference to cannabidiol. CBD is an active ingredient derived from marijuana
but also can be derived from hemp. CBD is marketed as an ingredient in products too numerous
to list.
Case No. 1:22-cr-00211-PAB Document 1 filed 06/22/22 USDC Colorado pg 2
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invest. Based upon the representations of RONALD PHILIP WALLACE, investors
provided monies for the purpose of funding the production and marketing of CBD
products.
4. On or about the dates listed below, in the State and District of Colorado
and elsewhere, RONALD PHILIP WALLACE, for the purpose of executing the aforesaid
scheme and artifice to defraud, directed and caused investors (identified herein by
initials) to transfer investment funds to bank accounts identified by RONALD PHILIP
WALLACE and in so doing caused writings, signs and signals to be transmitted by
means of wire communications in interstate commerce for the purpose of executing the
scheme as listed below:
Count Date Amount Investor Deposited to Account
1 11/9/2017 $33,000 S.C. BD Cann, Vectra x2990
2 1/21/2018 $80,000 S.C. Fource Management,
Vectra x2097
3 7/18/2018 $60,000 E.W. Lipro, Wells Fargo x9291
4 8/17/2018 $60,000 W.N. Lipro,Wells Fargo x9291
5 1/9/2019 $499,980 N.C. Lipro, JPMC x9101
6 2/11/2019 $499,980 N.C. Lipro, JPMC x9101
7 4/19/2019 $50,000 T.H. Lipro, JPMC x9101
8 5/10/2019 $150,000 T.H. Lipro, JPMC x9101
9 7/3/2019 $50,000 M.C. Lipro, JPMC x9101
All in violation of Title 18, United States Code, Sections 1343 and 2.
2
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COUNTS 10-40
5. On or about the dates noted below per count, in the State and District of
Colorado, and elsewhere, the defendants RONALD PHILIP WALLACE and STACE
YATER WALLACE, knowing that property involved in a financial transaction
represented the proceeds of some form of unlawful activity, conducted or attempted to
conduct such a financial transaction which involved the proceeds of a specified unlawful
activity, wire fraud in violation of Title 18, United States Code, Sections 1343 and 2,
knowing that the transaction was designed in whole or in part to conceal or disguise the
nature, the location, the source, the ownership, and the control of the proceeds of the
specified unlawful activity:
Count Date From Account To Account Amount
10 11/10/2017 BD Cann-x2920 Stace Yater Wallace- $11,200
x1010
11 11/10/2017 BD Cann-x2920 Sophic Solutions-x2768 $9,000
12 11/10/2017 Stace Yater Wallace- TYW, LLC- x0460 $3,486
x1010
13 11/10/2017 Stace Yater Wallace- TYW, LLC- x0460 $3,250
x1010
14 11/10/2017 Sophic Solutions- Ronald Wallace Pinnacle $2,200
x2768 Bank
15 11/10/2017 Sophic Solutions- TYW, LLC-x0460 $1,500
x2768
16 1/9/2019 Lipro-x9101 Sophic Solutions-x2768 $23,000
17 1/9/2019 Sophic Solutions- Stace Yater Wallace- $5,000
x2768 x1010
18 1/9/2019 Sophic Solutions- Stace Yater Wallace- $3,500
x2768 8264
19 1/9/2019 Stace Yater Wallace- TYW, LLC-x0460 $5,000
x1010
20 1/9/2019 Sophic Solutions- TYW, LLC-x0460 $3,399
x2768
3
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21 1/9/2019 Sophic Solutions- Ronald Wallace Pinnacle $2,300
x2768 Bank
22 1/9/2019 Sophic Solutions- TYW, LLC-x0460 $1,200
x2768
23 1/9/2019 Sophic Solutions- Stace Yater Wallace- $1,100
x2768 x1010
24 1/11/2019 Sophic Solutions- Stace-Yater Wallace- $4,500
x2768 x1010
25 1/11/2019 Stace Yater Wallace- TYW LLC-x0460 $3,775
x1010
26 1/14/2019 TYW LLC-x0460 Ishmael Arquata $1,700
27 2/11/2019 TYW LLC-x0460 Ishmael Arquata $1,700
28 2/14/2019 Lipro-x9101 Sophic Solutions-x2768 $5,000
29 2/14/2019 Lipro-x9101 Stace Yater Wallace- $3,800
x1010
30 2/14/2019 Stace Yater Wallace- TYW, LLC-x0460 $1,800
x2768
31 2/19/2019 Lipro-x9101 TYW, LLC-x0460 $4,456
32 2/25/2019 Lipro-x9101 TYW, LLC-x0460 $2,507.03
33 3/20/2019 Sophic Solutions- TYW, LLC-x0460 $2,215.98
x2768
34 5/10/2019 Lipro-x9101 Sophic Solutions-x2768 $10,000
35 5/10/2019 Sophic Solutions- Ronald Wallace Pinnacle $2,500
x2768 Bank
36 5/14/2019 Sophic Solutions- Stace Yater Wallace- $2,500
x2768 x1010
37 5/14/2019 Sophic Solutions- TYW, LLC-x2768 $1,490
x2768
38 5.14.2019 Ronald Wallace TYW, LLC-x2768 $750
Pinnacle Bank
39 5/14/2019 Stace Yater Wallace- TYW, LLC-x2768 $1,175
x1010
40 5/17/2019 TYW, LLC-x2768 Ishmael Arquata $1,700.00
All in violation of Title 18, United States Code, Sections 1956(a)(1)(B)(i) and 2.
COUNT 41
6. The Coronavirus Aid, Relief, and Economic Security ("CARES") Act was a
4
Case No. 1:22-cr-00211-PAB Document 1 filed 06/22/22 USDC Colorado pg 5
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federal law enacted in March 2020 and was designed to provide emergency financial
assistance to Americans impacted by the economic effects caused by the COVID-19
pandemic. The CARES Act authorized the SBA to issue loans to small businesses and
non-profit entities experiencing revenue loss due to the pandemic.
7. One form of assistance provided by the CARES Act was the
authorization of forgivable loans to small businesses for job retention and certain other
expenses, through a program referred to as the Paycheck Protection Program ("PPP").
Repayment of the loans was guaranteed by the United States government through the
Small Business Administration (SBA).
8. To obtain a PPP loan, a qualifying business was required to submit a
PPP loan application, signed by an authorized representative of the business. The
PPP loan application required the small business, through its authorized
representative, to acknowledge the program rules and make certain affirmative
certifications to be eligible to obtain the PPP loan. In the PPP loan application, the
small business, through its authorized representative, was required to provide, among
other things, its average monthly payroll expenses and number of employees. These
figures were used by financial institutions or lenders delegated by the SBA to
underwrite and approve the loans to calculate the amount of money the small business
was eligible to receive under the PPP. In addition, businesses applying for a PPP loan
were required to provide documentation showing their payroll expenses. The
applicant was required to certify that the information was true and accurate in all
material respects.
5
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9. PPP loan applications were processed by a participating financial
institution. If a PPP loan application was approved, the participating lender funded the
PPP loan using its own monies, which were guaranteed by the SBA. Data submitted
in the application, including information about the borrower, the total amount of the
loan, and the listed number of employees, was transmitted by the lender to the SBA in
the course of processing the loan.
10. PPP loan proceeds could only be used by the business on certain
permissible expenses, such as payroll costs, interest on mortgages, rent and utilities.2
The PPP allowed the interest and principal on the PPP loan to be entirely forgiven if
the business spent the loan proceeds on the allowable expenses within a designated
period of time and used a certain percentage of the PPP loan proceeds towards
payroll expenses.
11. Between on or about May 20, 2020, and on about April 27, 2021,
RONALD PHILIP WALLACE and STACE YATER WALLACE did knowingly and
intentionally execute, and attempt to execute, a scheme and artifice to defraud a
financial institution, and to obtain monies, funds, credits, assets, and other property
owned by, and under the custody and control of, a financial institution, by means of
materially false and fraudulent pretenses, representations and promises.
2
The authorized representative of the applicant was required to affirm that “The [PPP
loan] funds will be used to retain workers and maintain payroll or make mortgage interest
payments, lease payments and utility payments, as specified under the Paycheck Protection
Program Rules. I understand that if the funds are knowingly used for unauthorized purposes,
the federal government may hold me legally liable, such as charges for fraud.”
6
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12. In furtherance of the scheme, on or about May 21, 2020, a false and
misleading PPP loan application in the name of NATURLFX, Inc. 3 was submitted to
Zions Bank dba Vectra Bank of Colorado, a federally insured bank and a PPP loan
application processor and approved SBA lender of PPP loans. The application was
electronically signed by STACE YATER WALLACE. The information provided in the
application, as well as supporting documents and forms, were certified as true and
accurate. The application contained materially false information. As a result of the
application, on May 26, 2020, Vectra Bank of Colorado, funded NATURLFX, Inc. with a
$65,200 loan. All in violation of Title 18, United States Code, Sections 1344 and 2.
COUNT 42
13. Paragraphs 6 – 12 are realleged and incorporated by reference.
14. In furtherance of the scheme, on or about April 22, 2021, a false and
misleading PPP loan application in the name of NATURLFX, Inc. was submitted to
Zions Bank dba Vectra Bank of Colorado. The application requested an increase in the
$65,200.00 loan approved in May 2020. The information provided in the application, as
well as supporting documents and forms, were certified as true and accurate. The
application contained materially false information. As a result of the application, on or
about April 27, 2021, Vectra Bank funded NATURLFX, Inc. with a second draw on the
loan in the amount of $54,854.
All in violation of Title 18, United States Code, Sections 1344 and 2.
3
NATURLFX, Inc., was incorporated on August 13, 2019. On the same date, LiPro, Inc.,
notified the Colorado Secretary of State that it changed its corporate name to NATURLFX, Inc.
STACE YATER WALLACE was a member of the Board of Directors of NATURLFX, Inc., and
signed a corporate resolution which approved applying for “government assistance loans” on
May 12, 2020.
7
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COUNT 43
15. Paragraphs 6 – 11 are realleged and incorporated by reference.
16. In furtherance of the scheme, on or about February 4, 2021, a false and
misleading PPP application for a loan in the name of NATURLFX, Inc. was submitted to
Zions Bank dba Vectra Bank of Colorado, a federally insured bank and a PPP loan
application processor and approved SBA lender of PPP loans. The application was
electronically signed by STACE YATER WALLACE. The information provided, as well
as supporting documents and forms, were certified as true and accurate. The
application contained materially false information. As a result of the application, on or
about February 22, 2021, Vectra Bank funded NATURALFX, Inc. with a $113,492 loan.
All in violation of Title 18, United States Code, Sections1344 and 2.
COUNT 44
17. On or about February 23, 2021, in the State and District of Colorado,
and elsewhere, STACE YATER WALLACE and RONALD PHILLIP WALLACE, did
knowingly engage and attempt to engage in a monetary transaction, as defined in Title
18, United States Code, Section 1957(f)(1), in criminally derived property of a value
greater than $10,000.00, to wit: a wire transfer from a bank account of NATURLFX
Inc., to a trust account of a law firm identified herein as D.W., which was derived
from a specified unlawful activity, that is, bank fraud (a violation of Title 18, United
States Code, Section 1344) in violation of Title 18, United States Code, Sections
1957 and 2.
8
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NOTICE OF FORFEITURE
18. The allegations contained in Counts 1 through 44 of this Indictment hereby
are re-alleged and incorporated by reference for the purpose of alleging forfeiture
pursuant to the provisions of Title 18, United States Code, Sections 981(a)(1)(C),
982(a)(1), 982(a)(2), and Title 28, United States Code, Section 2461(c).
19. Upon conviction of one or more of the violations alleged in Counts 1
through 9 of this Indictment involving the commission of violations of Title 18, United
States Code, Sections 1343 and 2, the defendant RONALD PHILIP WALLACE shall
forfeit to the United States, pursuant to Title 18, United States Code, Section
981(a)(1)(C), and Title 28, United States Code, Section 2461(c), any and all rights, title,
and interest in all property constituting and derived from any proceeds obtained directly
and indirectly as a result of such offense or offenses, including in the form of a money
judgment in the amount of the proceeds obtained by the defendant and the scheme.
20. Upon conviction of one or more of the violations alleged in Counts 10
through 40 and 44 of this Indictment involving the commission of violations of Title 18,
United States Code, Sections 1956(a)(1)(B)(i), 1957, and 2, the defendants RONALD
PHILIP WALLACE and STACE YATER WALLACE shall forfeit to the United States,
pursuant to Title 18, United States Code, Section 982(a)(1), any and all rights, title, and
interest in all property involved in such offense or offenses, or property traceable to
such property, including in the form of a money judgment in the amount of the proceeds
obtained by the defendants.
21. Upon conviction of one or more of the violations alleged in Counts 41
through 43 of this Indictment involving the commission of violations of Title 18, United
9
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States Code, Sections 1344 and 2, the defendants RONALD PHILIP WALLACE and
STACE YATER WALLACE shall forfeit to the United States, pursuant to Title 18, United
States Code, Sections 982(a)(2), any and all rights, title, and interest in all property
constituting and derived from any proceeds obtained directly and indirectly as a result of
such offense or offenses, including in the form of a money judgment in the amount of
the proceeds obtained by the defendants and the scheme.
22. If any of the property described above, as a result of any act or omission
of RONALD PHILIP WALLACE and STACE YATER WALLACE, cannot be located
upon the exercise of due diligence; has been transferred or sold to, or deposited with, a
third party; has been substantially diminished in value; or has been commingled with
other property that cannot be divided without difficulty, it is the intent of the United
States, pursuant to Title 28, United States Code, Section 2461(c), incorporating Title 21,
United States Code, Section 853(p), to seek forfeiture of any other property of RONALD
PHILIP WALLACE and STACE YATER WALLACE up to the value of the forfeitable
property described above.
A TRUE BILL: Ink signature on file in Clerk’s Office
FOREPERSON
COLE FINEGAN
United States Attorney
By: s/Robert Brown
ROBERT BROWN
Assistant U.S. Attorney
1801 California St., Ste. 1600
Denver, CO 80202
10
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