As a trial looms in the federal criminal case against former local house-flipper Josh Romano, a paralegal he worked with has agreed to plead guilty to a charge of conspiring to defraud one of Romano’s former lenders.
Lindsey Passmore, who as a paralegal was authorized to disburse construction draws to Romano from the lender’s escrow account, entered into the plea agreement with federal prosecutors after initially pleading not guilty and requesting a jury trial when she and Romano were indicted in March.
The agreement requires that Passmore plead guilty to one count of conspiracy to commit wire fraud and pay more than $1.2 million in restitution, including nearly $582,000 to the lender and $550,000 to S. Page Allen & Associates, the local real estate law firm where Passmore worked.
Other wire fraud charges against Passmore would be dropped as part of the agreement, which was entered in June in U.S. District Court.
Maximum penalties for the conspiracy count include 20 years in prison, a $250,000 fine, full restitution, forfeiture of assets and three years’ supervised release. Sentencing guidelines included with the agreement state that Passmore’s actual sentence could be above or below that advisory sentencing range.
A sentencing hearing for Passmore was to be held this week but was continued to Nov. 17.
The new hearing date is one month after the start of Romano’s jury trial, which is scheduled to get underway Oct. 17. The three-day trial had been set for June but was rescheduled due to a “complex case” designation.
Assistant U.S. Attorney Michael Moore is prosecuting the case and reached the plea agreement with Passmore and her attorney, Gregory Sheldon of Henrico law firm Bain Sheldon.
Romano is represented in the case by Vaughan Jones, a local criminal defense attorney.
According to the indictment, Romano and Passmore schemed to defraud the lender by drawing from escrowed funds that were meant for certain home renovation projects so Romano could put the money toward other projects and increase his chances for more loans.
Filed in mid-March, the indictment followed the completion of Romano’s Chapter 7 bankruptcy, a three-year case that wrapped up last year.
The close of that 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.
It isn’t clear whether the lenders in the two cases are the same. The lender in the indictment is referred to only as “Lender A.”
The bankruptcy judge dismissed the Tuckahoe Funding suit, siding with Romano in placing blame for the missing funds on S. Page Allen & Associates. The Midlothian-based firm, which employed Passmore at the time, is referred to in the indictment as “Law Firm A.”
The 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.
At one point renovating and selling nearly 30 homes in a year, Romano’s Cobblestone Development Group 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.
Romano has pleaded not guilty to charges of wire fraud and conspiring to commit bank fraud against the unidentified lender.