Josh Romano, top right, during filming of the HGTV ‘Richmond Rehabbers’ pilot. (Courtesy Breese Romano)
Correction: An earlier version of this story incorrectly reported that Romano now works for Master Improvements Inc., a local contracting firm. The CEO of that firm has since told BizSense that Romano has never been an employee of the company or its affiliates. The information was based on a LinkedIn profile that the CEO said they’ve told Romano to correct.
Two years into his ongoing personal bankruptcy, local house rehabber Josh Romano is facing allegations of fraud and embezzlement from one of his former lenders.
Romano, who rose to local prominence three years ago when his real estate firm was considered for a TV series, was sued last month by Tuckahoe Funding LLC, a so-called hard money lender owned by William Everette Starke Jr.
The lawsuit, filed Aug. 17 in federal bankruptcy court, accuses Romano of making misleading statements to their mutual real estate attorney that resulted in funds meant for certain house projects being misappropriated.
The suit is the latest filing in Romano’s Chapter 7 proceeding that has been underway since October 2018. The action seeks to prevent debt that Starke is looking to collect — at least $750,000 in alleged damages — from being discharged as part of the bankruptcy case.
According to the suit, Tuckahoe lent money to Romano’s firm for 21 properties that were to be rehabbed using those funds. By late 2017, Romano’s company at the time, Cobblestone Development Group, had purchased nine of the properties with $1.5 million in loans from Tuckahoe that were secured by deeds on those properties.
The suit alleges that, in August 2017, Tuckahoe began requesting escrow balances for those transactions from S. Page Allen & Associates, the law firm led by real estate attorney Page Allen that represented both Tuckahoe and Romano in their dealings. As part of the arrangement, the law firm was responsible for disbursing construction draws from those funds to Romano for work on the properties.
That December, after about a third of the funds had reportedly been drawn, Tuckahoe sought to take over future draws and requested that the law firm wire over the remaining funds. The lawsuit states that it was then that Tuckahoe learned that the funds said to be remaining had in fact been disbursed to Romano without its authorization.
The suit alleges that Romano gave the law firm explicit instructions to draw those funds for use on the Tuckahoe properties, but instead put those funds toward other projects or expenses. As a result, the suit states, the Tuckahoe properties were not improved, costing Tuckahoe $750,000 in alleged losses — the balance of the escrow funds that were allegedly misapplied.
In arguing that the debt should not be discharged, the suit alleges that Romano participated in embezzlement and fraud, the latter due to his alleged misrepresentations to the law firm about the draws. The suit claims that Romano also embezzled funds from his Cobblestone firm for his personal use.
A vandalized Cobblestone sign in 2018 in front of one of several Romano properties that were deeded back to lenders. (BizSense file photo)
The suit states that Tuckahoe has since mitigated some of its damages by reaching a settlement with the law firm, which it determined was unaware of what Romano was doing with the funds. It seeks an order against Romano denying discharge of the debt and payment of at least the $750,000 to Tuckahoe.
Tuckahoe is represented by Williams Mullen attorneys William Bayliss and Joseph Blackburn III. A call to Bayliss last week seeking comment was not returned.
Romano is represented in his bankruptcy case by Robert Canfield of Canfield Wells, who did not return a call Tuesday. Attempts to talk with Romano in recent days were unsuccessful.
Homes deeded back to lenders
The lawsuit comes two years after Romano began winding down his Cobblestone brand amid financial and legal troubles that had begun piling up in early 2018.
That spring, deeds in lieu of foreclosure were recorded at the city courthouse for at least nine Romano properties, including seven that were deeded back to Tuckahoe.
Another Romano property was later sold to Tuckahoe, which was one of several lenders who worked with him over the years.
That October, Romano filed for Chapter 7 protection, listing nearly $770,000 in liabilities owed to 75 creditors. The case initially was assigned to attorney Bruce Matson, who served as bankruptcy trustee until last November, when he resigned amid the collapse of LeClairRyan, where he was a partner. Peter Barrett with Kutak Rock has since been assigned as trustee.
In the early months of his case, Romano relocated his residence twice, according to court filings. He currently resides in Southampton with his wife Breese, who co-starred with him in the “Richmond Rehabbers” pilot for HGTV, which did not pick up the show for a series.
Breese and Josh Romano. (Jonathan Spiers)
Previous debt petition denied
Tuckahoe’s lawsuit echoes claims made by some former Romano clients who accused him of moving money out of escrow accounts for their homes and putting the funds toward other projects, contributing to financial troubles that resulted in work stoppages and delays.
It also isn’t the first attempt in Romano’s case to prevent debt from being discharged, though it could be the first to be granted.
Last year, former client Melissa Bass filed a similar petition, seeking to collect nearly $240,000 in damages awarded to her in a previous lawsuit against Romano. The award amount stemmed from a renovation of her residence that she said was not completed on time and required repairs to finish and correct code violations.
The amount was awarded through a default judgment in Richmond Circuit Court, but U.S. Bankruptcy Judge Kevin Huennekens denied Bass’s request and ruled her award dischargeable, finding that she failed to prove that Romano committed fraud, as alleged, by not completing her renovation as promised.
Huennekens said that Bass needed to show that Romano intended to not complete the work, parts of which Romano continued after Bass closed on her house, which at the time was unfinished. Bass argued that she was induced to close due to fraudulent representations Romano made, but Huennekens ruled that the incomplete work was due to a lack of funds — not an intent to not complete the job.
Huennekens’ ruling was entered last October, eight months after Bass filed her petition. She was represented in her case, which was closed in April, by Johnie Muncy with law firm Samuel I. White. Muncy did not return a call Tuesday seeking comment.
Josh Romano, top right, during filming of the HGTV ‘Richmond Rehabbers’ pilot. (Courtesy Breese Romano)
Correction: An earlier version of this story incorrectly reported that Romano now works for Master Improvements Inc., a local contracting firm. The CEO of that firm has since told BizSense that Romano has never been an employee of the company or its affiliates. The information was based on a LinkedIn profile that the CEO said they’ve told Romano to correct.
Two years into his ongoing personal bankruptcy, local house rehabber Josh Romano is facing allegations of fraud and embezzlement from one of his former lenders.
Romano, who rose to local prominence three years ago when his real estate firm was considered for a TV series, was sued last month by Tuckahoe Funding LLC, a so-called hard money lender owned by William Everette Starke Jr.
The lawsuit, filed Aug. 17 in federal bankruptcy court, accuses Romano of making misleading statements to their mutual real estate attorney that resulted in funds meant for certain house projects being misappropriated.
The suit is the latest filing in Romano’s Chapter 7 proceeding that has been underway since October 2018. The action seeks to prevent debt that Starke is looking to collect — at least $750,000 in alleged damages — from being discharged as part of the bankruptcy case.
According to the suit, Tuckahoe lent money to Romano’s firm for 21 properties that were to be rehabbed using those funds. By late 2017, Romano’s company at the time, Cobblestone Development Group, had purchased nine of the properties with $1.5 million in loans from Tuckahoe that were secured by deeds on those properties.
The suit alleges that, in August 2017, Tuckahoe began requesting escrow balances for those transactions from S. Page Allen & Associates, the law firm led by real estate attorney Page Allen that represented both Tuckahoe and Romano in their dealings. As part of the arrangement, the law firm was responsible for disbursing construction draws from those funds to Romano for work on the properties.
That December, after about a third of the funds had reportedly been drawn, Tuckahoe sought to take over future draws and requested that the law firm wire over the remaining funds. The lawsuit states that it was then that Tuckahoe learned that the funds said to be remaining had in fact been disbursed to Romano without its authorization.
The suit alleges that Romano gave the law firm explicit instructions to draw those funds for use on the Tuckahoe properties, but instead put those funds toward other projects or expenses. As a result, the suit states, the Tuckahoe properties were not improved, costing Tuckahoe $750,000 in alleged losses — the balance of the escrow funds that were allegedly misapplied.
In arguing that the debt should not be discharged, the suit alleges that Romano participated in embezzlement and fraud, the latter due to his alleged misrepresentations to the law firm about the draws. The suit claims that Romano also embezzled funds from his Cobblestone firm for his personal use.
A vandalized Cobblestone sign in 2018 in front of one of several Romano properties that were deeded back to lenders. (BizSense file photo)
The suit states that Tuckahoe has since mitigated some of its damages by reaching a settlement with the law firm, which it determined was unaware of what Romano was doing with the funds. It seeks an order against Romano denying discharge of the debt and payment of at least the $750,000 to Tuckahoe.
Tuckahoe is represented by Williams Mullen attorneys William Bayliss and Joseph Blackburn III. A call to Bayliss last week seeking comment was not returned.
Romano is represented in his bankruptcy case by Robert Canfield of Canfield Wells, who did not return a call Tuesday. Attempts to talk with Romano in recent days were unsuccessful.
Homes deeded back to lenders
The lawsuit comes two years after Romano began winding down his Cobblestone brand amid financial and legal troubles that had begun piling up in early 2018.
That spring, deeds in lieu of foreclosure were recorded at the city courthouse for at least nine Romano properties, including seven that were deeded back to Tuckahoe.
Another Romano property was later sold to Tuckahoe, which was one of several lenders who worked with him over the years.
That October, Romano filed for Chapter 7 protection, listing nearly $770,000 in liabilities owed to 75 creditors. The case initially was assigned to attorney Bruce Matson, who served as bankruptcy trustee until last November, when he resigned amid the collapse of LeClairRyan, where he was a partner. Peter Barrett with Kutak Rock has since been assigned as trustee.
In the early months of his case, Romano relocated his residence twice, according to court filings. He currently resides in Southampton with his wife Breese, who co-starred with him in the “Richmond Rehabbers” pilot for HGTV, which did not pick up the show for a series.
Breese and Josh Romano. (Jonathan Spiers)
Previous debt petition denied
Tuckahoe’s lawsuit echoes claims made by some former Romano clients who accused him of moving money out of escrow accounts for their homes and putting the funds toward other projects, contributing to financial troubles that resulted in work stoppages and delays.
It also isn’t the first attempt in Romano’s case to prevent debt from being discharged, though it could be the first to be granted.
Last year, former client Melissa Bass filed a similar petition, seeking to collect nearly $240,000 in damages awarded to her in a previous lawsuit against Romano. The award amount stemmed from a renovation of her residence that she said was not completed on time and required repairs to finish and correct code violations.
The amount was awarded through a default judgment in Richmond Circuit Court, but U.S. Bankruptcy Judge Kevin Huennekens denied Bass’s request and ruled her award dischargeable, finding that she failed to prove that Romano committed fraud, as alleged, by not completing her renovation as promised.
Huennekens said that Bass needed to show that Romano intended to not complete the work, parts of which Romano continued after Bass closed on her house, which at the time was unfinished. Bass argued that she was induced to close due to fraudulent representations Romano made, but Huennekens ruled that the incomplete work was due to a lack of funds — not an intent to not complete the job.
Huennekens’ ruling was entered last October, eight months after Bass filed her petition. She was represented in her case, which was closed in April, by Johnie Muncy with law firm Samuel I. White. Muncy did not return a call Tuesday seeking comment.
How many stories have to run to keep showing this guy is nothing but a crook? Who in the world would even put him on their employ list? And if he is in a Chapter 7, who is paying these legal bills? This guy’s story continues to fascinate me and I thought he left town!?!
Inheritance from Breese’s mother is word on the street. Breese was also selling a $28,000 boat on Facebook Marketplace as of Aug 27th.
An inheritance, a boat, a new house. Also, heard a new car. Sounds like some people living pretty high on the hog. What do I know? I have to make an honest living.
Their story has always read like, well, a TV show.
I followed their blog for a while and thought the houses they did finish were beautiful. I also watched their pilot on HGTV. What a shame he had no business acumen (or morals, hmmm).