CHESTERFIELD, Va. (WRIC) — A Chesterfield builder has been sentenced to 9 years in prison after he stole $1.2 million from lenders with the help of a paralegal and what prosecutors called “a species of Ponzi scheme.”
Joshua Brian Romano, 40, owned at least three businesses that flipped homes in the Richmond area, relying on outside investors to finance the purchases and up-front costs of renovating the homes. But that money was legally restricted to be used only on the projects that it was lent for, managed by a local law firm working on behalf of the investors.
Romano and a paralegal at that firm, Lindsay Epps Passmore, have now been convicted of circumventing those safeguards so that Romano could withdraw money from the law firm’s accounts as he pleased, spending money meant for new projects on older ones that had fallen behind, even as his debt grew ever more unmanageable.
After the pair was hit with federal charges in Richmond, Passmore reached a plea agreement with prosecutors, testifying that she had falsified account balances and made withdrawals at Romano’s instruction.
Passmore ultimately received just over a year in prison, but Romano pushed on to trial, maintaining that he was innocent and that the true embezzlers were Passmore and the attorney she worked for — and that he was simply a bad businessman who kept poor books.
Romano was ultimately convicted at trial of four counts of wire fraud, and prosecutors wrote in a sentencing memorandum that Romano’s scheme amounted to a “species of Ponzi scheme,” because he used new funds intended for new properties to help finish properties he was already “underwater” on.
Prosecutors noted that even when confronted with evidence of his misconduct at trial, Romano lied about his role in it.
“Romano’s complete lack of remorse is a significant aggravating factor,” they wrote.
In his own sentencing letter, Romano continued to downplay his involvement in the fraud, emphasizing Passmore’s role in falsifying the accounts and painting himself as a struggling small business owner.
“Mr. Romano’s actions are common in his business,” he wrote. “It is likely that Mr. Romano’s sloppy business practices left him unaware of the extent of his offense.”
Romano asked for just 5 years in prison — below the guideline range for his offenses, while prosecutors called for a sentence of 10 years, above the guideline range.
Ultimately, the judge erred towards the argument of the prosecution, evidently unconvinced by Romano’s explanation, and imposed a sentence of 9 years.
