Homebuilder William Romm III was given a two-and-a-half-year federal prison sentence on Thursday for defrauding the bankruptcy system, marking the second time in the last week that someone from the local real estate community has been convicted of a financial crime.
In Romm’s case, his punishment stems from his concealing hundreds of thousands of dollars from the trustee during his personal bankruptcy proceedings and spending money that should have gone to creditors on personal items such as two boats.
The 44-year-old Henrico County resident was charged by federal authorities on April 8 and pleaded guilty to a single count of mail fraud on April 26.
While the mail fraud count carried a potential maximum of 20 years imprisonment, the U.S. Attorney’s Office asked for 33 months. Romm and his attorney, William Dinkin, asked for a 12-month sentence followed by 12 months of home detention.
In documents filed as part of Romm’s sentencing hearing before Judge Henry Hudson, prosecutors reiterated that Romm repeatedly lied under oath and filed false submissions with the bankruptcy court while trying to hide assets he inherited after the death of his father.
“Having successfully obscured his financial windfall from the bankruptcy court, the defendant spent those funds on various personal expenses, toys, and in stock trading,” prosecutors wrote. “By the time authorities uncovered the defendant’s fraud scheme, the defendant had managed to dissipate nearly the entirety of the $400,000 he had concealed from the bankruptcy court.”
Prosecutors said Romm may have entered into bankruptcy in January 2019 to repay creditors in an orderly way, but that he ultimately abused the protections afforded by the bankruptcy system.
“The defendant’s creditors wanted to be made whole – but the defendant decided he would like a boat. The United States Trustees requested a truthful accounting – but the defendant decided he would like a bigger boat,” prosecutors wrote.
“The bankruptcy court required candor and completeness – but the defendant decided he would prefer to dabble in day-trading. The defendant committed fraud not because he (believed he) needed to, but because he wanted to.”
A graduate of Godwin High and VMI, Romm started Romm Custom Homes in 2006 before running into financial trouble beginning in 2015. While building in The Cameron at Grey Oaks neighborhood near Wyndham in Henrico, Romm lost some home lots to foreclosure and was sued by some of his customers who had been left with unfinished houses.
He then started Millstone Builders and worked for two other companies from 2018 through this year.
In addition to lying about his financial holdings, Romm’s scheme to conceal assets also included hiding the fact that he had been recently married in 2019 and opened bank and investment accounts in his then-wife’s name. He admitted to forging that spouse’s signature on checks and using the secret brokerage account to trade stocks with the hidden real estate proceeds from his late father.
Romm also used the marriage to hide the purchase of a $100,000 2018 Parker 25-foot boat, which he registered it in his now ex-wife’s name.
In asking for a lesser sentence, Romm and his attorney emphasized his life as an otherwise decent, hard-working father of two daughters and talented custom homebuilder who made an uncharacteristic misstep and poor financial decisions.
“Romm’s character and background stand in stark contrast to the offense for which he entered a guilty plea,” Dinkins wrote. “He is a devoted father and well-respected member of his community. Mr. Romm has been a hard-working contractor and developer who, until the events that led to his guilty plea, always did the right thing for his family and clients.”
“It is with great shock that his friends and family try to understand how he could have made the mistakes that bring him before this court. This conviction is truly an aberration in a life otherwise devoted to family and helping others.”
Letters from Romm’s supporters sent to Judge Hudson and included in the court record echo that sentiment. Letters were submitted from his stepfather, stepmother, ex-wife, sister, longtime friends and former coworkers.
“He has always been very industrious and goal-oriented, willing to work to acquire things he wanted,” Romm’s stepfather wrote. “It distresses me that he finds himself in your court. Undoubtedly, he made some poor choices in the matter before you. However, I feel that his actions have more to do with greedy thoughtlessness than overall mal intent.”
Most of the letters asked for leniency for the sake of Romm’s daughters, aged 14 and 11.
Romm agreed to voluntarily report to prison on Oct. 28 to begin his sentence and remains free until then.
The court recommended he serve his time at the low security federal prison in Petersburg. He was also sentenced to three years of supervised release and ordered to participate in an alcohol treatment program and mental health treatment.
Dinkin, in an email to BizSense Monday afternoon, said: “Mr. Romm entered a guilty plea and accepts responsibility for his actions and the consequences imposed by the Court. He looks forward to closing this painful chapter of his life and moving forward as a responsible, law-abiding citizen.”
Should he end up in the Petersburg prison, Romm would likely be serving his sentence with Moe Mathews, a local real estate agent and investor who was sentenced last week to 41 months for defrauding the federal Paycheck Protection Program.
Mathews also was represented by Dinkin.