Heat olive oil in a large pot over medium heat. Cook and stir onion and garlic until soft, about 5 minutes. Stir in red bell pepper and carrot; cook for 4 to 5 minutes. Add mushrooms; cook and stir until softened, about 2 minutes.
Pour wine into the pot; simmer until slightly reduced, about 1 minute. Stir in diced tomatoes and vegetable broth. Bring sauce to a boil; reduce heat and simmer until flavors combine, 10 to 15 minutes. Stir in lentils, paprika, basil, oregano, dried herbs, and nutmeg; cook until lentils are heated through, about 5 minutes.
Substitute white wine for the red wine if preferred.
You can also use 3 ounces dried green or du Puy lentils for this recipe. Rinse well, put into a saucepan, and cover with cold water. Bring to a boil; reduce heat and simmer uncovered until tender, about 30 minutes. Drain and use in the recipe.