The Oregon Pickleball Club was created in 2022 by a friend and a two-time convicted felon who stole tens of thousands of dollars from two investors, which ultimately caused the club to fail.
Assistant U.S. Attorney Julia E. Jarrett claims that Joshua Wallace of Lake Oswego spent the money on himself, paying thousands of dollars in dues for his membership in a private golf club, purchasing $50,000 worth of gambling chips during a single trip to a casino in Las Vegas, visiting Palm Springs, Orlando, and Los Angeles, and purchasing a low-tier Danish soccer club.
According to court documents revealing Wallace’s previous federal convictions in New York and Utah, it was the third company he assisted in founding and subsequently deceived.
Wallace, 48, was sentenced to a year and a half in prison by U.S. District Judge Amy M. Baggio on Thursday for wire fraud, and he was also ordered to pay $100,000 in restitution.
After committing the new offense and other infractions while on probation for his 2020 conviction in Utah for giving a false statement to a federal agent, Baggio was sentenced to an additional eight months in prison.
He must turn himself in to the U.S. Marshals Service on March 6 in order to begin serving his two-year, two-month jail sentence, which is longer than the prosecutor had requested.
Wallace’s dishonesty, deceit, and pathological and brazen behavior, according to Baggio, made her extremely concerned about his financial threat to our community. She termed him a habitual fraudster and a brazen liar.
Wallace, wearing tan pants and a dress shirt with stripes in blue, sat next to his attorney and refused to speak to the judge.
In order to get two additional friends to contribute $50,000 each, he and his friend who founded the Oregon Pickleball Club created a business plan and presented it to other friends at their golf club.
According to court documents, Wallace established a commercial bank account, took over the club’s finances, and became the only signatory.
According to Jarrett, Wallace took out sizable amounts of money for his own use after the investment funds were transferred into the account.
Wallace’s actions are reprehensible, according to Jarrett, even though the sum of money at stake in this instance is not.
Wallace, for instance, spent $30,000 the day after a $40,000 deposit was made to the club’s account in October 2022, she said. Shortly after many deposits, he did it again more.
Wallace had mostly spent all of the investment funds on himself by the end of January 2023, before Oregon City’s pickleball court business was operational, according to Jarrett.
However, she stated he proceeded to accumulate over $120,000 in debt and then sent many fraudulent checks to the club’s construction contractors and landlord.
Wallace used social media to try to get people to join the club in the interim.
Midway through May 2023, the club posted on its Facebook page that it was launching a Pay as you Play service for the summer. For just $10 per player per hour for doubles play, get your buddies together and use our brand-new, air-conditioned courts for $40 per hour.
In June 2023, when his partners finally realized what had transpired, Wallace had secured a third party’s $50,000 investment under the pretense of opening a second facility.
The Oregon Pickleball Club was disbanded on November 9, 2023, after being incorporated on September 13, 2022, according to state documents.
In addition to a one-year sentence for the Oregon offense, Jarrett requested a six-month jail sentence for the probation violations.
She claimed that Wallace had a habit of asking for investments and then spending them right away, whether it was funding the Draft Kings online betting site or his premium golf club dues. According to her, he even paid off some previous reparation payments with part of the stolen funds.
Jamie S. Kilberg, Wallace’s defense attorney, sought for a one-year sentence that would include six months in jail and the remaining time in home confinement so Wallace could try to repay his restitution.
According to Kilberg, the case included a legitimate pickleball firm that Wallace and his friend Lukas Ganzar started because they both loved the game, not a phony company or false claims.
For a short time, they had paying members and staff after renovating a facility.
Kilberg claimed that he got ahead of himself by thinking he could use membership fees to replace the money that had been invested.
According to Kilberg, he worked really hard to attempt to make it happen. In actuality, their investments were insufficient.
According to a police investigation, Wallace mostly vanished after texting his club partners in June 2023 to apologize for his mistakes and to admit that he was a fool.
Ganzar was left in charge of the club, attempting to determine how to salvage it and all of its unpaid debts. According to the police report, Ganzar pleaded with the Oregon City landlords not to padlock the club’s door.
Wallace’s lawyer contended that Wallace didn’t take lavish vacations and that he and his partners withdrew their offer of a third-tier Danish soccer team, which they had purchased for one euro, after discovering they would be confronted with a significant amount of unreported tax liability.
According to his attorney, Wallace did not have a job and was personally burdened by his family’s everyday costs. However, Kilberg claims that he spent at least $92,600 on the club’s start-up expenses and legal capital enhancements, such as nets, furnishings, and employee salaries. Wallace’s attorney acknowledged that his client misrepresented the status of invoices and his capacity to pay for the job to Ganzar, his partner, and contractors.
Wallace previously created and oversaw System Capital LLC, a commodities trading company, where he misled clients by presenting fictitious audit reports and other paperwork to entice investment. He was arrested in 2010, and Jarrett claims that during his pretrial release, he stole money directly from clients and used it for personal purposes. In 2013, he received a two-year, three-month jail sentence in a federal court in New York, along with a $733,206 restitution order.
He perpetrated another deception in that case between his plea and punishment. He acquired a biofuels company that was initially a respectable enterprise in 2011. However, according to court documents, he became embroiled in a massive biofuel kickback scheme a few months later and, when questioned, lied to the IRS.
He was given a five-year probationary period and forced to pay $48,744 in reparations after entering a guilty plea to creating a false statement.
Wallace was breaking terms of his previous federal probation during this most recent fraud, including opening unauthorized bank accounts, starting a business without authorization, traveling outside of Oregon without permission, making large financial transactions without authorization, and failing to provide financial information requested by his probation officer.
Less than 6% of the roughly $800,000 in restitution mandated by the convictions in Utah and New York has been paid by him.
Wallace’s lack of accountability was pointed out by the judge when he rejected a defense request to shorten his prison sentence so he could work to pay off his debts.
The offender doesn’t pay his restitution in any substantial quantity, even when he has access to money, according to the record of these three instances to date, Baggio said. By committing additional crimes, he accumulates more reparation.
Baggio imposed additional limitations on Wallace’s three-year supervised release following his jail sentence, in addition to making the additional eight months consecutive to his 1/12-year sentence.
He is prohibited from opening a new business, working in any position involving fundraising, controlling or accessing financial accounts, and soliciting money from anyone—with the exception of family members for sums under $500—without the probation officer’s agreement.
In addition, he needs to get evaluated for gambling addiction and finish any suggested therapy.
According to his attorney, he gambled $111,400 from his Oregon cannabis company, J.R Land Management, while he was on probation for his conviction in Utah.
— Maxine Bernstein writes about criminal justice and federal courts. You can contact her via [email protected], 503-221-8212, X@maxoregonian, or LinkedIn.
Your support is essential to our journalism. Sign up for OregonLive.com now.
Stories by
Maxine Bernstein
-
Lawsuit filed against Clark County jail deputies after video showed them dragging handcuffed Black man with rope
-
Home from boot camp, Army recruit from Oregon dies of fentanyl OD
-
Woman prosecuted in Oregon in $4M scheme to smuggle and prescribe unapproved drug for fatal cat disease
-
Eugene wood treatment facility, its president to pay $1.5M in fines for hazardous waste violations
-
Woman who tagged federal building in Portland before protest pleads guilty
