Which part was untrue? That he was ordered by the court to return the money to Hampden? That the Wallace's referee didn't bother to show and so was replaced by Wallace's friend, Martin Coulcher? That the deciding vote in the wager was cast by Wallace's original referee and good friend? That Wallace was penniless after wasting away most of his inherited wealth? It's easy to believe in light of Wallace's horrendous monetary mismanagement that he and his referees conspired to defraud Hampden and besmirch the movement. Small wonder Hampden was bitter to the point of exhaustion.
Is it untrue that Wallace's most "scientific" of "research" was on the subject of spiritualism, seances and phrenology? Which part exactly are you contesting?
I find your refraction argument as compelling as you would find my arguing for sunken ships by refraction, I'd wager.