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Wine Seller to Admit Fraud Guilt

June 15, 2005|David Rosenzweig | Times Staff Writer

A Colorado wine merchant accused of bilking mail-order and Internet customers out of at least $2.5 million has agreed to plead guilty to federal fraud charges in Los Angeles, the U.S. attorney's office said Tuesday.

In a plea deal with prosecutors, Ronald Phillip Wallace, 47, acknowledged operating a kind of Ponzi scheme in the sale of fine wines, some costing as much as $1,000 a bottle, through his now-defunct outlet, Rare LLC.

Between 2000 and 2003, Rare solicited connoisseurs across the country to purchase wine futures, in which a customer acquires wine that has been fermented but not yet bottled and marketed. Many of the top wineries in France's Bordeaux region sell their best vintages by that method.

According to his plea deal, Wallace used some of the deposits to buy a luxury car, remodel his Aspen Valley house and pay for a 2001 wine-tasting at the Peninsula Hotel in Beverly Hills.

Victims included Paul and Maurice Marciano, founders of Guess Jeans; Jamie Moyer, a pitcher for the Seattle Mariners; Garth Ancier, an executive with the WB Network; Arthur Sarkissian, a movie executive, and Antonio Castanos, a restaurateur.

The Marcianos paid nearly $115,000 for bottles of 1998 Bordeaux that were never delivered.

Wallace agreed to plead guilty to two counts of mail fraud, four counts of wire fraud and one count of conducting an unlawful monetary transaction in which he used $13,000 of Sarkissian's deposit to import a BMW from Europe.

He also promised to make restitution to his victims.

He is expected to enter his plea in the next several weeks.

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