DENVER -- An Internet wine merchant from Colorado was arrested at his home in Basalt Thursday on federal fraud charges, the Denver District Attorney's Office said.

Ronald Phillip Wallace, 47, who owned a Basalt-based wine outlet called Rare LLC, allegedly bilked his customers out of millions of dollars by selling wines he didn't have, the indictment alleges. His company advertised over the Internet and in wine publications.

Wallace was named in a 21-count indictment returned Tuesday by a federal grand jury in Los Angeles. The indictment alleges that Wallace executed a fraudulent scheme by, among other things, selling older wines that he did not own, selling wine futures he did not own, and diverting and misusing "early deposits" that clients had entrusted to him to purchase wine futures.

The indictment alleges that Wallace's scheme ran from at least 1999 until early 2003. Rare was forced into bankruptcy in March 2003.

The federal indictment specifically discusses Rare's offering of Bordeaux futures for several vintages. In 1999, for example, Rare allegedly accepted and confirmed more than $1.5 million in orders from clients for the purchase of 1998 wines. One customer, Paul Marciano, who is a co-chairman of Guess?, Inc., paid nearly $115,000 for futures of large-format bottles of 1998 Bordeaux that Wallace had not secured, the indictment alleges.

"Through a series of deceptions that included ads in a wine trade publication, Wallace exploited the trust he developed with his knowledge of the world's best wines," said United States Attorney Debra W. Yang. "While Wallace plied his trade in the rarified world of exclusive tastings and $1,000 bottles of wine, in the end he turned out to be nothing more than a common fraudster."

Wallace was charged with five counts of mail fraud, 10 counts of wire fraud, four counts of money laundering, and one unlawful monetary transaction.

If convicted of all charges, Wallace faces a maximum possible sentence of 195 years in federal prison.