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February 17, 2012 in City
Foreclosure was expected today on fire-destroyed mansion
Firefighters douse flames consuming a riverfront home in Post Falls early Thursday morning.
(Full-size photo)
Arson investigators are combing through the debris of a million-dollar riverfront estate that was engulfed by fire Thursday morning as lenders prepared to hold a foreclosure on the home.
Flames were visible to daybreak commuters along Interstate 90. Parts of the 10,000-square-foot brick and wood mansion – assessed at about $1.5 million – continued to smolder at nightfall.
No one was home and no one was injured in the fire, said Ron Sampert, Kootenai County fire chief.
The fire capped months of financial and legal tumult for the homeowners, said Leonard Wallace, who bought the home in 2002 with his wife, Pamela Wallace. Lender Deutsche Bank filed a foreclosure action against the Wallaces last year, and the family has turned to Bankruptcy Court to try to shield their assets at least twice. Their latest filing reflects some anxiety.
In a Jan. 23 filing, Pamela Wallace pleaded with the federal bankruptcy judge overseeing the case to postpone the pending foreclosure action.
“For me, (foreclosure) was one of the main reasons for filing in the bankruptcy court. I write this as a victim, my children are victims of an ongoing crime, this is my 911 call for help,” she wrote.
Her motion was denied. On Thursday, Leonard Wallace said, he was on the verge of settling the foreclosure action and keeping the home.
“I really believe we were close,” he said.
Arson investigators noted that police were called to the home on Wednesday night for a domestic dispute. The Wallaces were in a shouting match about flooding – possibly from the dishwasher. Leonard Wallace then turned off the water supply to the house to prevent water damage, said Post Falls police Capt. Greg McLean. No charges were filed.
Since the home is warmed by a radiant-heat system, the water shutoff forced the family out for the night.
Leonard Wallace said he spent the night at his workshop a few miles away, which has a small living quarters. Pamela Wallace stayed with friends, and their grown children, who were living at the home with the couple, spent the night in a motel.
The fire erupted hours later, engulfing the huge home. Wallace worried that it might have been started by one or two of the home’s gas fireplaces, which were left on, or perhaps from a gas water heater that he had installed.
In the days leading up to the fire, family members were seen taking valuables and furnishings from the home, according to multiple neighbors.
“Yes, we did move some stuff,” Leonard Wallace acknowledged. “We’ve been in a constant situation of change and conflict.”
McLean said police investigators interviewed the Wallaces at the scene of the fire, on the 1500 block of East Plaza Drive.
In 2009, Leonard Wallace turned his stake in the home – which sits next to the so-called “Amway House” – over to his wife as his business investments imploded. That same year he filed for bankruptcy, listing $24 million in assets and $20 million in liabilities.
That bankruptcy, however, was dismissed when the federal judge overseeing the case ruled that the Wallaces were spending money at a rapid clip without adequate documentation. The Wallaces reportedly claimed $71,000 in expenses in five months. About $48,000 of that was characterized as miscellaneous household expenses, according to court records.
The Wallaces have since filed for bankruptcy protection again, and Leonard Wallace said in an interview Thursday that he expects to prove he is a victim of a securities fraud. His lawyers have abandoned him and he is representing himself in the proceeding.
That claim centers on Wallace’s investment in a company called MagTrac. He said he bought an $800,000 initial stake in the company that had plans to develop a patented identification mechanism for dairy cattle. He kept investing money, he said.
The business relationship soured and Wallace sued to get his money out, claiming that he was the victim of a securities fraud.
Wallace lost in arbitration and then lost an appeal. His former businesses partners, with a $2.5 million judgment in hand, then moved against Wallace’s properties in other states, including California and Washington. In his bankruptcy filing, Wallace listed the judgment as his largest liability, now valued at $4.8 million.
Wallace is a self-made millionaire. He said he learned the trade of electrical engineering and used his technical and business skills to start and later sell two power supply companies in California that remain in business and employ thousands of people. He also ran the Big Velvet Ranch, a large and controversial elk farm, in the Bitterroot Valley south of Missoula.
Now 71, he has yet to retire and was developing the 900-acre Raspberry Ridge development near Post Falls before the recession brought many such projects to a halt.
The couple are current on taxes, according to the Kootenai County Treasurer’s Office.
A guest house adjacent to the main home that burned Thursday was lost to Mountain West Bank as part of a separate foreclosure action initiated last year. Court records indicate that Pamela Wallace’s mother had lived in the guest house.
Mountain West filed a complaint last year, accusing the Wallaces of trespassing on the guest house property and letting their dogs run across the grounds that had been common until the foreclosure.
One confrontation between a bank agent and Pamela Wallace was caught on tape and referenced in court files as evidence of angry and erratic behavior.
The complaint was dropped when the Wallaces filed for their latest bankruptcy.
Parishes giving $1.5 million toward settling sex cases 
oneanddone on February 17 at 4:00 a.m.
“He said he learned the trade of electrical engineering…” Generally speaking, those who use a phrase like that never finished school. What’s that old saw … “Oh what a tangled web we weave …”
rosehips on February 17 at 6:41 a.m.
These people are victims? Hmmmm…
I wonder how many people they’ve victimized to get to where they thought they wanted to be? I’m sure they never envisioned this. Sounds like karma to me.
dataxman on February 17 at 6:43 a.m.
oneanddoe - that is your takeaway? The guy starts and sells two successful companies that are still in operation today and you wonder if he got a degree? If he didn’t makes me wonder how much value a degree holds…
wcougars on February 17 at 7:11 a.m.
The cause of the fire was friction. The insurance papers rubbed against the mortgage papers till combustion.
wakeboarder on February 17 at 8:21 a.m.
“Leonard Wallace then turned off the water supply to the house to prevent water damage”
“Since the home is warmed by a radiant-heat system, the water shutoff forced the family out for the night.”
“or perhaps from a gas water heater that he had installed.”
HEY Arson investigators you might look into the fact these things NEED water to keep working right?
zelda on February 17 at 8:40 a.m.
Ordinarily you don’t need to turn off the water to the *entire* house if the dishwasher is leaking.
Wallace says he started and sold two successful companies. My impression is that he claims a lot of things without much substantiation. The woods around here are full of self-proclaimed geniuses and crack-pot “inventors.”
PROFINTOX on February 17 at 9:07 a.m.
zelda — regarding second paragraph, true about there being a lot of individuals around here like that but I do not think in this case there is any real reason to take that statement at fact value. They clearly had assets in the multi-millions (24 million to be exact), a 1.5 million dollar home and a historical string of large property involvement etc… Seems they were certainly enjoying quite a bit of success to me until the recession hit, so I do not think with that type of financial history it is a stretch to believe he started and sold a couple of successful companies.
I will say though at this point, there sure seems to be a lot of dysfunctional behavior in general going on with these people, both financial and otherwise. Some of the behaviors reported in the article definitely smack of a sense of entitlement as well.
zelda on February 17 at 9:26 a.m.
@PROFINTOX — There are a lot of people here and elsewhere that definitely were way over-leveraged. There was no shortage of banks and financial institutions willing lend large sums prior to 2008 and their lending standards were nil. More so in Idaho than in Washington.
Spending a whole bunch of money you don’t have, to me, is not proof of success.
BlondeSquawker on February 17 at 9:51 a.m.
And this, folks, is how the 1% largely live.
zelda on February 17 at 10:50 a.m.
Wallace sounds like a prince of a fellow. I just read this article about his Big Velvet Ranch in Darby, MT. http://www.hcn.org/issues/118/3765 . It was a place where people could come to shoot penned bull elk as trophies while sitting in their trucks. Plus, the section about the harvesting process to obtain the velvet for traditional Asian aphrodesiac medicine is quite a revelation. Living in a bright pink log house kind of puts the icing on the cake in terms of lifestyle.
http://www.hcn.org/issues/118/3765
DHF on February 17 at 11:07 a.m.
Does anyone know if the Puryear’s sold the Amway house next door as it was for sale last year. Curiosity.
RedCedar on February 17 at 11:12 a.m.
Since Mr. Wallace is apparently being tried in the press here today, I’m not sure which side I’m on. On the one hand, he’s an electrical engineer and he founded two successful power companies that are still in business. So, he’s a smart guy who knows how to make things work. On the other hand, he’s a real estate developer, and I just have a thing against people who bulldoze every living organism off of hundreds of acres, stick cheesy houses all over it, and give it a cutesy “nature” name.
As for the elk ranch, I will cut him some slack. Those “shoot it from your truck” operations are largely a result of FDA regulations that make it next to impossible for a small elk (or other livestock) operation to sell meat directly to the public. If they wanted slaughter, cut, and wrap their meat and sell it at a roadside butcher shop they’d have to have a huge setup comparable to what the big packing houses have that meets all the regulations. It’s just not practical. So instead they have to sell what is basically meat on the hoof, and not a facsimile of a hunting experience. Yes, the antlers can be worth real money, but the main reason to “hunt” at one of these places is because you want a freezer full of good organically-grown elk meat so badly that you’re willing to buy it on the hoof, and slaughter and butcher it yourself. If you must, zelda, think of it as an illogical way to sell meat rather than an unsporting way to hunt.
It’s pretty clear that everyone here thinks the house didn’t just accidentally set itself on fire. There was certainly motive and opportunity for Mr. Wallace to set the fire. There are clearly some family issues as well as legal issues. On the other hand, most of us have had motive and opportunity to commit some crime, and yet we didn’t commit it. If he left the gas on the stove turned on but unlit, and left a candle burning on the table…. well… is there enough left of the stove to tell what position the knobs were in? Is accidentally leaving the stove on the same as arson? Suspicion is easy. Proof is tough. They are not going to find a gas can with his fingerprints on it in the middle of the living room. There’s no word of any witnesses yet. It makes for a good mystery and a good discussion.
PROFINTOX on February 17 at 11:14 a.m.
zelda — I am not really disagreeing with you per se. Primarily what I was saying is that with the large amount of money this guy obviously has had in the past, then unless it came from the lottery or a trust fund, he was successful at acquiring it. Judging from what I have read from this guy, that success undoubtedly did come at others expense — so I am not saying this is success to praise — simply that it is not beyond reason that he ran businesses that successfully lined his wallet. I am not speaking to ethics whatsoever.
Anyway, the Big Velvet Ranch article is very interesting and to me, not surprising given what I gleaned from this article. All I can say is that the investigators should look at this fire very closely to determine cause.
zelda on February 17 at 11:44 a.m.
My instinct is to not believe a word this guy says. He made millions as an engineer from two successful companies — according to himself. On the engineering continuum, power supplies aren’t exactly rocket science (although modern technology in this realm is a bit more interesting than it used to be.) In many high-tech companies, working on power supplies is considered scut work.
All in all, I find there are a disturbing number of self-declared successful inventors, often self-trained engineers from the S. Calif. aerospace/defense industries, who have decided to make a home for themselves in the Inland NW where they find affinities for lifestyles and ideologies that can be generously described as quirky. Yeah, everyone is entitled to their Idiosyncrasies, but what we have to go on in terms of this guy’s success story and history are his own descriptions.
RedCedar on February 17 at 1:06 p.m.
The difference between an engineer and in “inventor” is that the inventor rarely makes anything that actually works, if it does work he doesn’t understand why and can’t manufacture them in quantity, and he blames all failures on a conspiracy. Inventors, therefore, never make real money from their contraptions and confabulations. Since Mr Wallace clearly made a lot of money, I tend to suspect that he’s a real engineer.
Our of curiosity, I did check to see if any Leonard Wallace was licensed as an engineer in Idaho, which includes out-of-state engineers licensed by comity in Idaho. There is no such person listed. That said, most degreed engineers never bother to get their P.E. license. It’s a lot of work, with a hard test and much practical experience needed, and most employers do not require their engineers to be licensed.
Al_Loysius on February 17 at 1:41 p.m.
I wonder what Brian Breen might say. I don’t know if he has worked arson cases. #1, they don’t believe coincidences; #2 moving valuables out of the house before the fire is a huge red flag; #3 turning off the water is a double red flag.
It is amazing what forensic evidence good arson investigators can find. They will tell you that fires don’t destroy evidence, they create evidence.
RedCedar on February 17 at 1:52 p.m.
I don’t know. When I was a boy I accidentally set my dad’s shop on fire, and the fire investigator never did figure out where or how it started. He told my dad “I guess we’ll chalk it up to mice playing with matches.” There have also been some famous cases of very “scientific” fire investigation being completely wrong. I think there was one of a man who was wrongly convicted of murdering his family by setting the house on fire, all based on fancy mis-interpretation of burn patterns.
zelda on February 17 at 1:56 p.m.
RedCedar — If he once worked for Lockheed or General Dynamics (for example) and was classified as an “engineer” according to the companies’ job-classification system, he could in fact call himself an engineer. But nowadays, most tech firms’ engineers are people with degrees from bona fide colleges or universities with an accredited engineering program. People can call themselves whatever they want to, but a lot of times it falls into the “don’t need no stinkin’ degree” category.
What his CV really is, at this point, is just a guess. Just hoping that sooner or later we find out how this all turns out. There seem to be quite a few stories lately where the media aren’t closing the loop, i.e., names of people killed Corvette crash on Broadway Feb. 14 and whatever came of the investigation into the death of the guy in the Davenport (or was it Reardan) cemetery who was shot by the town’s police chief?
RedCedar on February 17 at 2:42 p.m.
zelda, I knew some of the engineers as you described, and as a rule they were better than the wet-behind-the-ears college kids. I knew guys who had started out as electronics techs and worked their way up to “electrical engineer” or started out as draftsmen and worked their way up to “mechanical engineer”, at least in the company HR department’s view of it. They always had excellent practical knowledge of what really works and how things get built in the factory, which is a lot better than some kid turning in a computer simulation and calling it a “design”. So long as there are senior design engineers on staff who could look at the trickier theoretical aspects of some problems, I’m fine with these “experience-taught” engineers.
For what it’s worth, it’s not even neccessary to have a degree to get a professional engineer’s license. The applicant must have 4 additional years of work experience, if they don’t have a degree, and they must still pass the same rigorous tests (the EIT and the Branch exam), which as a practical matter means they need to take some classes and study some books. I agree with you about the “don’t need no stinkin’ degree” people. Lots of practical mechanics and other tradespeople really dislike engineers as being pinheaded know-it-alls. Some of it is insecurity and some of it is justified. There’s enough truth to it to perpetuate the stereotype.
Nonetheless, all the self-described “inventors” I’ve met had so little knowledge of the most basic scientific principles that not only did their inventions not work, but often they didn’t even know that they didn’t work. To them, I always conclude with one sincere statement. “I could be wrong of course. The only thing that matters in the end is if you build it and it works. Good luck.” But they usually don’t build it, because it’s way easier to talk about all the conspiracies against them than it is to go through the frustrations, failures, sweat, and expense of actually turning an idea into a physical reality.
hunternomore on February 17 at 3:03 p.m.
OK, Zelda, I’m LOL over your comment about people moving here from So Cal and adopting a “quirky” lifestyle. You must mean they’ve adopted it because they see everyone else living that way here in the great northwest and thinking they fit in! LOL
brianrbreen on February 18 at 8:49 a.m.
@Al_Loysius
The arson cases I worked involved murders or where victims were injured. But I’ve been on the other side defending people accused. The various local Fire Department Arson Investigators are top notch and they do the crime scene investigation of all the cases whether someone was killed, injured or not. They receive pretty extensive training not only in the scene investigation stuff but all so the gumshoe stuff. In cases where no one was hurt they usually do all the follow-up. Where someone died or someone was injured they usually get saddled with a Detective. I don’t know how Kootenai County does it.
Arson cases are just like any other case even though you might suspect someone you have to tie them to the evidence and the actual crime or you are SOL and sometimes that can be real difficult. Establishing a financial motive or a motive to hurt someone generally is pretty easy but you still have to have evidence that ties the suspect to the actual arson.
Establishing the fires origin is a pretty painstaking process, burn patterns, the use of accelerants, and all the forensic stuff those guys know down to the Nat’s arse. In the Spokane area where I’ve been involved using “good qualified arson experts” to investigate the scene from a defense perspective I have only found that there may be some very minor disagreements about the findings. That hasn’t been true in other areas of the country. These guys locally (Spokane Area) do a darn good job. They might be out there for days at that scene before they can make a call, and sometimes they can’t make a call one way or the other.
As far as I know this case hasn’t been determined to be arson, so even though some people might be suspicious because of what appears to be a financial motive, the public doesn’t even know if there was a financial motive. If it was in foreclosure was the insurance paid up? If so, who was covered etc.
If it was insured, the insurance company will have their own “arson expert” review the scene from a totally different perspective, and amazingly I’ve seen cases where even though the FD Arson Investigators were unable to determine a cause or attributed the fire to accidental causes, the insurance “arson expert” determined the cause to be arson…go figure.
These are tough cases, and the Arson Cops know they will have a bunch of people taking a critical look at their work.
Arson does create evidence, as far as the fire is concerned, but sometimes it also destroys evidence or helps to obscure evidence so they have to be on their toes.
I think it might be premature to cast any aspersions until the facts are in.
maddiewalker on February 24 at 10:09 a.m.
“He said he learned the trade of electrical engineering…” Generally speaking, those who use a phrase like that never finished school”
Stupid comment. If you are 71, there’s a good chance you didn’t go to college because many decades ago, you didn’t have to go to college for electrical engineering. There are still many TRADES where you work as an apprentice. Better to learn your trade in the field from the professional working in the profession than in some classroom, by an instructor, who is most likely retired from the profession and out of the loop.
silicon_valley_guy on March 08 at 11:31 p.m.
I worked for Len Wallace many years ago at his first power supply company as tech. He founded Power-One in Camarillo, California and it now has $1B in annual sales with 1,000’s of workers. Len is a smart, hard working, self-taught electrical engineer. He also founded Condor DC Power Supplies and they too employ 1,000’s of workers. When you have companies that grow this large they employee top notch degreed engineers from fine schools. Both these companies started in Len’s garage by his hard work and with little money. No different from Bill Gates, Steve Jobs and the new entrepreneurs who all drop out of college like Mark Zuckerberg to start their companies.
Len has flaws, quirky by some standards, is sometimes arrogant and this can rub people the wrong way. To me these are all common characteristics of many successful silicon valley entrepreneurs.
The family is in trouble due to a business gone bad, lawyers chasing him because he has assets and a tuff economy. Len is 71 now and still chasing the entrepreneur dream, I’m amazed.