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Former Bellevue-based lender and developer Thomas R. Hazelrigg III, a friend and business associate of bankrupt real-estate magnate Michael R. Mastro, has been indicted on charges of tax evasion and Social Security number fraud.

The four-count indictment unsealed Monday charges Hazelrigg, 67, understated his income and hid assets while for a decade channeling earnings from his businesses into accounts he kept secret from the Internal Revenue Service and other creditors.

Each count is punishable by up to five years in prison, the U.S. Attorney’s Office said.

Hazelrigg pleaded not guilty to the charges Monday and was released on bond, according to court records. His court-appointed attorney, Peter Mair, could not be reached for comment.

Hazelrigg was a so-called “hard money” lender, offering high-interest, short-term loans to hard-pressed developers whose real-estate projects couldn’t get bank financing.

While earning millions, he “reported large losses on his individual income-tax returns, but failed to report substantial income he received,” the indictment charges.

From 2005 to 2007 Hazelrigg had commissions and other money he earned paid instead to a Mastro-owned company called FRB, according to the indictment.

The funds went into an account purportedly belonging to Hazelrigg’s three children, but Hazelrigg would subsequently transfer the money to his own bank account and use it for personal spending, the indictment charges.

Hazelrigg concealed his assets in part to avoid paying $533,000 due the IRS from his 1997 settlement of unpaid taxes and penalties for the years 1989 to 1991, according to the indictment.

Meanwhile, he used concealed bank accounts “to pay for luxurious items for himself, and for friends and business associates,” the indictment charges.

He bought a penthouse unit at Lincoln Tower in Bellevue for $4.2 million and spent at least $2.4 million more on its build-out, the indictment alleges. He also bought more than $1 million in chips at casinos from Auburn to California, and spent on country-club membership, use of a private jet, racehorses and two Chihuly chandeliers costing about $460,000.

The Social Security fraud charges involve him using his late father’s Social Security number on two business accounts established for his firms.

Hazelrigg currently is a resident of Rancho Mirage, Calif., according to the U.S. Attorney’s Office.

He was pushed into Chapter 7 bankruptcy early last year by creditors including James Rigby, the court-appointed trustee in Mastro’s bankruptcy, who hopes to recover $76 million that courts have decreed Hazelrigg owes Mastro’s creditors.

Last summer, he told the court his only income is $1,400 a month in Social Security benefits.

Information from Seattle Times archives is included in this story.