COLORADO, USA — A Colorado couple is accused of lying to obtain nearly $1.5 million in investments from individuals to fund the production, and marketing of CBD products, according to the U.S. Department of Justice (DOJ).
Ronald Philip Wallace,65, and Stace Yater Wallace, 67, are also accused of working together to secure more than $200,000 in COVID-19 Paycheck Protection Program funds by including false information on loan applications, the DOJ said.
A federal grand jury indicted both of them on June 22, on charges of wire fraud, money laundering, and bank fraud. Both appeared in U.S. District Court Monday and were released on bond.
According to the indictment, Ronald Wallace ran a scheme between September 2014 and August 2019 where he obtained money through "fraudulent pretenses, representations, and promises."
As part of that scheme, the indictment says, he sought investments to fund companies he was associated with which were involved with producing and selling CBD products.
While doing so, the indictment alleges, Ronald Wallace provided potential investors with "false or misleading" information with the goal of getting them to provide money. Based on Ronald Wallace's statements, investors provided funds they believed would be used to fund the production and marketing of CBD products, the indictment says.
Once funds were received, the indictment alleges that the couple took actions to conceal or disguise the nature and source of the money.
In 2020, the federal CARES Act was passed to provide financial relief during the coronavirus pandemic. One such program, known as the Paycheck Protection Program (PPP) allowed small businesses impacted by the pandemic to apply for loans.
Between May 2020 and April of the year, the incident says the Wallaces provided several "false and misleading" loan applications in the name of NATURLFX Inc.
An application made on May 21, 2020, was electronically signed by Stace Wallace, the affidavit says. While the application and supporting documents and forms were certified as "true and accurate," the incident says they actually contained "materially false information."
As a result of the application, a loan for $65,200 was approved.
About a year later, on April 22, 2021, a loan application was placed to increase the amount of the original loan request. Five days later, an additional draw was approved for $54,854.
A separate loan request was made on Feb. 4, 2021, which again used "false and misleading information," the indictment says. Stace Wallace signed it electronically, according to the indictment. As a result of the application, a loan for $113,492 was funded on Feb. 22, 2021.
Ronald Wallace faces nine counts of wire fraud, 31 counts of money laundering, three counts of bank fraud, and one count of conducting a monetary transaction in criminally derived property greater than $10,000.
Stace Wallace faces 31 counts of money laundering, three counts of bank fraud, and one count of conducting a monetary transaction in criminally derived property greater than $10,000.
Each count of wire fraud carries a penalty of up to 20 years in prison and a fine of up to $250,000. Each count of money laundering carries a penalty of up to 20 years in prison and a fine of up to $500,000.
Each count of bank fraud carries a penalty of up to 30 years in prison and a fine of up to $250,000. Conducting a transaction greater than $10,000 in criminally derived proceeds carries a penalty of up to 10 years in prison and a fine of up to $250,000.
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