Former Bellevue-based developer and lender Thomas R. Hazelrigg III, a friend and business associate of the fugitive Seattle real-estate magnate Michael Mastro, was sentenced Thursday to four and a half years in prison for tax evasion.

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Former Bellevue-based developer and lender Thomas R. Hazelrigg III, a friend and business associate of the fugitive Seattle real-estate magnate Michael Mastro, was sentenced Thursday to 4½ years in prison for tax evasion.

U.S. District Judge Thomas S. Zilly said the sentence is appropriate for a man who deliberately evaded paying taxes and lied on the witness stand during trial.

“You knew from the get-go you owed these taxes — you agreed to pay them,” Zilly said. “The only reason we are standing here today is because you didn’t pay those taxes, not withstanding the fact that you made more than $10 million during the period of time the government was asking you to pay those taxes.”

Prosecutors said that for a decade, Hazelrigg, 68, funneled money from his businesses into accounts he kept secret from the Internal Revenue Service, which was pursuing him for $533,454 he already owed in back taxes.

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Hazelrigg had acknowledged in 1997 he owed the IRS taxes for 1989 though 1991 but avoided paying by concealing income while spending millions on gambling, private jets, a Bellevue penthouse, two Palm Springs, Calif., homes and a butler.

He was found guilty on two counts of tax evasion in December after a nine-day trial.

Zilly ordered Hazelrigg to pay $1.08 million, owed to the IRS for his back taxes, interest and penalties. His prison term will be followed by three years of supervised release.

Hazelrigg was a loan broker who paired high-net-worth lenders with borrowers who needed short-term loans and were willing to pay high interest rates.

For his services, he received a fee paid in a variety of ways. Some payments were channeled into a Mastro-owned company called FRB.

Court documents indicate Hazelrigg made more than $10 million in loan fees between 2005 and 2006 that were funneled into FRB and other accounts.

With the concealed funds, Hazelrigg bought a penthouse unit in Lincoln Tower in downtown Bellevue for $3 million and spent an additional $3 million to build it out, according to court documents.

The statute of limitations for Hazelrigg’s tax obligation with the IRS expired in 2007. He reacted by sending an email to his accountants proclaiming, “Maybe there is a god. Good job everyone. I am legit again for the first time in 11 years,” according to court documents.

After he learned the statute of limitations had expired, Hazelrigg restructured his financial affairs to again hold money in accounts in his own name and began to obtain loans and purchase property in his own name, including another condominium in Lincoln Tower for $1.4 million in 2008.

While the IRS could no longer pursue the tax lien, the door was left open for the government to pursue him on criminal charges.

“We are all taught from a young age that the lie is often worse than the original offense,” IRS Criminal Investigation Special Agent in Charge Teri Alexander said in a statement after the sentencing. “Thomas Hazelrigg cheated on his taxes and then spent many years and a great deal of effort trying to cover it up. The truth finally caught up with him.”

Addressing the court before sentencing, Hazelrigg told the judge he felt the government was really after Mastro, and described himself as “collateral damage” after having worked with Mastro in the past.

“They lost Mr. Mastro; now they want to make me the scapegoat because I never went in and talked to them,’ he said.

Hazelrigg asked to serve his prison term at Terminal Island prison in Southern California, which he said has access to better health care for his neck, back and heart issues.