The latest chapter in Josh Romano’s fall from grace has come in the form of a federal indictment.
A grand jury on Tuesday handed down fraud charges against Romano and Lindsey Passmore, a former paralegal he worked with, in a case stemming from a dispute between the once-high-profile local house-flipper and one of his former lenders.
An arrest warrant for Romano also was issued Tuesday. He made an initial court appearance Wednesday and was released ahead of further hearings.
He is scheduled to be arraigned March 30 along with Passmore, who was issued a summons. Her first appearance and bond hearing would coincide with the arraignment.
The indictment alleges Romano and Passmore, at the time a paralegal at local real estate law firm S. Page Allen & Associates, conspired to commit bank fraud and committed wire fraud against the lender, referred to in the filing as “Lender A.”
S. Page Allen & Associates, referred to in the indictment as “Law Firm A,” was responsible for disbursing construction draws to Romano’s Cobblestone Development Group for certain home renovation projects. Passmore was authorized by the law firm to disburse the funds.
The indictment alleges that Romano and Passmore schemed to defraud the lender by drawing from those funds so Romano could put them toward other renovation projects. It alleges the scheme was aimed at concealing the embezzlement and increasing Romano’s chances for more loans.
The filing follows the completion of Romano’s Chapter 7 bankruptcy, a three-year case that wrapped up last year.
The close of the case coincided with a ruling in Romano’s favor in a lawsuit brought by Tuckahoe Funding LLC, a so-called hard money lender that alleged Romano committed fraud and embezzlement that led to funds for certain projects being misappropriated. The LLC is owned by William Everette Starke Jr.
U.S. Bankruptcy Judge Kevin Huennekens dismissed the suit, siding with Romano in placing blame for the missing funds on S. Page Allen & Associates.
Tuesday’s indictment alleges that Passmore wired the escrowed funds at Romano’s direction and without Lender A’s authorization. When the lender inquired about the funds, Passmore allegedly concealed the embezzlement by sending the lender emails with false escrow balances.
The reported account balances for six projects totaled more than $1 million, according to the indictment, whereas the actual funds that remained totaled $676. The funds had been deposited with Park Sterling Bank.
If convicted, Romano and Passmore would face forfeiture of property or assets. The indictment specifies a forfeiture money judgment of more than $1.2 million.
Attempts to reach Romano were unsuccessful Wednesday. A phone number for Romano came back as restricted to a call and text message. Court records did not list an attorney for Romano as of Wednesday afternoon.
At one point renovating and selling nearly 30 homes in a year, Romano’s Cobblestone firm hit a high point in 2017 when it was featured in an HGTV pilot called “Richmond Rehabbers,” which was not picked up for a series. Romano wound down Cobblestone in 2018 amid mounting debt and disputes with former clients.