Ex-President of ESM Receives 30 Years for Role in Scandal

A federal judge on Friday sentenced the former president of ESM Government Securities to 30 years in prison for his role in the bilking of $315 million from investors.

A contrite Nicholas B. Wallace told reporters that he had hoped for a lighter sentence but understood the judge’s decision. He must serve at least 10 years before he is eligible for parole.

“I’m terribly sorry for the pain and suffering and losses that were caused by ESM. I wish I could undo the damage done,” Wallace said afterward.

The collapse of ESM in 1985 sparked a run on savings and loan institutions in Ohio, forcing Gov. Richard Celeste to close temporarily the state-chartered thrifts. It also cost school boards and cities around the nation that had invested millions of dollars.

U.S. District Judge Jose A. Gonzalez fined Wallace $850 and allowed him to remain free on bond while his attorneys appeal the sentence. Wallace, 45, was ordered to surrender Dec. 3.

On July 3, a jury convicted Wallace on one count of conspiracy and 16 counts of mail fraud, which could have brought a maximum sentence of 85 years in prison and $26,000 in fines. He was acquitted on 17 other counts.

Jane Moscowitz, assistant U.S. attorney, asked the judge to send a message to other business executives around the country who may, as she said Wallace did, fail to see the consequences that “sharp dealings” have on the lives of others.