By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
By Eric Nicholson
As Sanders stressed, it all comes for free. Charter schools are publicly funded and regulated by the state; they are intended to serve as hubs of innovative education, independent of school districts and subject to looser guidelines. Like all public schools, they're paid by the state for every student enrolled.
After the town halls, in a brief phone conversation, Wallace would tell the Observer only that he's received hundreds of applications from prospective teachers and students. Otherwise, he said, he was too busy to answer questions. He then declined multiple interviews over the course of several months.
What little is known about Wallace is gleaned from brief online bios and other slivers of information related to businesses he's started, including Sports Groove LLC and Prime Time Player, both sports-related ventures involving Sanders. Until recently he served on the University of North Texas College of Education Development Board, the school's fundraising arm. He said during town halls that he's a Baylor alum; according to the school's registrar's office, he's a semester short of graduating.
One of his former businesses, DFW Business Training Center, is "the first fully interactive sales school," according to Wallace's website. A former client of that business showed up at the Fort Worth town hall to learn about his latest venture.
"He's an incredible entrepreneur," the former student, Alex Burns, said. He taught her "transfer of confidence" as a way of doing business. "You cannot transfer what you don't have," she said. He also covered the value of adding acronyms to a sales pitch — like, say, PRIME — with consumer confidence-building keywords attached to each letter.
But it's another of Wallace's "Prime" businesses that sent a former investor into an obsessive year-long quest to reclaim his investment, and to bring as much scrutiny as possible upon Wallace and Sanders' latest endeavor.
Lawrence Smith sits at the dining room table of his quaint Arlington home, surrounded his recent life's work: an alphabetized binder of documents, plus loose legal filings strewn about the white tablecloth. His Dell laptop sits open, ready to heed his inevitable impulses for further research.
On the other side of the floral centerpiece sits his childhood best friend and co-plaintiff, Derwin Williams, who's in town from New Jersey to give a deposition in their lawsuit against Wallace and Sanders.
Both men are dressed in athletic clothing, ready for a high school track meet they're headed to that afternoon. Smith is broad-shouldered and burly and speaks unfiltered; when he's mad, it comes across more like excitement. And when he's discussing Wallace, he's always excited.
It started in May 2008, Smith says. At a friend's suggestion, he attended a gathering hosted by Wallace to introduce potential investors to a new business venture. The meeting was held at Charity Church, the future home of Prime Prep's Fort Worth campus.
Wallace pitched his next big idea: PrimeTimePlayer Pages, a recruiting publication to tout student-athletes. For the low price of $199, Smith claims, Wallace offered the men the chance to be independent representatives of the project, a status that would allow them to recruit students and earn a cut of the commission. He also offered them shares of the company. Smith and at least six others all bought in, paying anywhere from $199 to $25,000 for a slice of PrimeTimePlayer Pages, they claimed in a lawsuit against Sanders, Wallace and his businesses. (The defendants denied the claims and filed a counterclaim accusing Smith and his fellow investors of harassment.)
"You walk away from this guy feeling like he is just the most ethical and honest person you want to meet," says Al Williams, one of the investors. "He's smooth, I'll tell you."
Smith had mentored and coached students for most of his life at the local high school, he says, and he had experience investing small amounts here and there. PrimeTimePlayer Pages was the perfect intersection of those interests, with the bonus of a local hero's name brand. "Think about it. It's Deion Sanders," Smith says. Sanders even showed up to deliver the keynote at an AAU basketball tournament where the new reps were dispatched to sign up athletes, the group's lawsuit claimed.
Smith signed on, investing $3,000 for a share of the business and $199 to be a rep, he claims. But almost two years passed without the book being distributed to colleges and parents as promised, Smith says, and the 500 colleges to which the book was supposed to be delivered knew nothing about it. So in February 2010, Smith compiled statements from investors and sent them to Sanders. According to Smith, Sanders called and said he was unaware of the complaints. He promised to "take care of it" and call back in a few days. That was the last Smith spoke to Sanders.
But the recruitment book wasn't the only deal Smith had brewing with Wallace. Around the same time, Wallace was working with the University of North Texas to establish a charter school. Texas law caps the number of charters that can be issued at 215, making approval highly competitive, and the state wasn't approving new charters at the time. But there's no cap on schools sponsored by universities, a historically infrequent arrangement.