Josh Romano, the one-time high-profile Richmond house flipper who was tried and convicted last year for embezzling more than $1 million from a lender, has been sentenced for those crimes to a term of nine years in federal prison.
The punishment was handed down Thursday morning by U.S. District Court Judge Robert Payne in front of a gallery of Romano’s supporters on one side of the courtroom and federal investigators and one of Romano’s victims on the other.
Romano requested and received approval to self-report to U.S. Marshals to begin his sentence on March 21, to allow him to be present for the expected birth of his child earlier that month.
The sentencing follows a three-day trial last fall, at which a jury found Romano guilty of four of seven counts.
The crux of his crimes involved $1.2 million in funds that were disbursed five years ago from escrow accounts for six home rehab projects without authorization of Romano’s main lender, locally based Tuckahoe Funding, run by Rhett Starke.
Prosecutors said the funds were instead put toward other projects and that Romano put some toward personal expenses, such as membership dues to Richmond Country Club and private school tuition.
Romano’s co-conspirator, Lindsey Passmore, who worked as a paralegal at S. Page Allen & Associates, the law firm that handled the escrow accounts, pleaded guilty to a charge of conspiracy to commit wire fraud and was a cooperating witness in the Romano case. Passmore is set to begin a 14-month sentence next month.
Part of Romano’s defense was to attempt to focus much of the blame for the misappropriated funds on Passmore and the head of the law firm, Page Allen.
Allen, who was not charged criminally or civilly related to the saga, agreed to pay out of her own pocket more than $500,000 to Tuckahoe Funding as part of a mediated settlement with Starke. Allen also was recently reprimanded by the Virginia State Bar for not properly managing Passmore and for not properly overseeing the handling of escrow funds.
Allen was cited by Payne as ultimately one of the victims of the scandal.
Another of those victims is Starke, who provided one of the more emotional moments of the nearly two-hour hearing with a statement made to the judge.
“I feel like I need to do this for my business partners, myself and my family,” Starke told Payne.
Starke said he’s still on the hook for $600,000 in principle owed to another lender for the money Romano spent and estimated that he’ll need an additional $900,000 to wipe the debt clean along with related taxes and interest.
“These are all things I have to pay,” Starke said. “Whatever sentence Mr. Romano gets, I have incurred a life sentence because I will be paying for this the rest of my life.
“I find no joy in this today. It’s a tragedy for everyone involved,” he said.
Speaking on Romano’s behalf at Thursday’s hearing in an effort to sway the judge toward a lesser sentence were Elwood Yates III, who is Romano’s current employer at E.F. Yates Construction, and Scott Ford, a local attorney who runs Ford Richardson law firm and had previously hired Romano on real estate deals and construction projects.
Both described Romano as a hardworking man and a skilled contractor.
“I have always found him to be a person who is true to his word and a kind and big-hearted person,” Ford said.
Romano’s attorney, Vaughan Jones, described his client as a “very good craftsman but a very bad businessman.”
While Romano’s term of 108 months of incarceration was at the high end of the sentencing range suggested by federal authorities, Judge Payne told Romano that he was considering an even harsher prison term.
“Frankly, I considered 15 years,” Payne said during the hearing, adding that he was swayed by the fact that Romano had no prior criminal record and was otherwise known as a hardworking man who supported his family.
Still, Payne did not discount the damage done by Romano’s scheme.
“What you did, you did knowingly and intentionally, and you caused great harm,” Payne said. “You showed no remorse. In my judgment this is an exceedingly serious crime.”
Romano, when given his chance to address the court, spoke swiftly from a written statement.
“I regret that any of my actions or oversights led us here today,” he said, adding that he was raised to be honest and hardworking.
Showing that he still maintains his innocence, Romano added: “I will continue to seek and speak for the truth and pray that it’s heard.”
Romano’s sentence also includes three years of supervised release after his prison term, plus restitution of $581,000 to Starke’s firm and $550,000 to Page Allen’s law firm.
He has the right to appeal within 14 days.