Former Bellevue Debt Collector Accused of Fraud, Tax Evasion

Thomas R. Hazelrigg, III, a former Bellevue developer known locally for buying and collecting on local real estate debts, is accused of Social Security number fraud and tax evasion after a grand jury indictment last week, according to the U.S. Attorney's Office.

Hazelrigg, 67, of Rancho Mirage, CA, pleaded not guilty in U.S. District Court in Seattle on Monday, Aug. 5, following indictment on two counts of evading and defeating payment of tax, and two counts of Social Security number misuse, according to the U.S. Attorney's Office.

Hazelrigg is accused of hiding his assets from the IRS as he spent millions on a lifestyle that included a penthouse in Bellevue's One Lincoln Tower, gambling, thoroughbred horse racing, leasing a private aircraft and paying for country club fees, according to the U.S. Attorney's Office.

A 1993 Seattle Times profile of Hazelrigg portrayed him as not so forgiving of others' debts. The article said that Hazelrigg, a former college linebacker who was drafted by the Denver Broncos, bought millions of dollars of debt collection judgements from banks and other lenders for a fraction of amounts owed, and went after debtors' accounts and homes to get a return on his investments:

The 47-year-old ex-college linebacker, a full-time developer himself, seizes other developers' houses, taps their bank accounts and freezes their credit lines. He leaves little room for negotiation and doesn't grant extensions to deadlines.

The article also stated that Hazelrigg was a co-investor in a project with Medina developer Michael Mastro, who earlier this was allowed to stay in France after a French court declined to extradite him and his wife to the U.S. to face charges of bankruptcy fraud.

According to the indictment returned last week, Hazelrigg failed to pay a tax debt of $533,454 owed for tax years 1989, 1990 and 1991. Despite not paying his taxes, he spent money on jets, $460,000 chandeliers by artist Dale Chihuly, and high-roller gambling and a multi-million dollar purchase and remodel of a Bellevue penthouse, according to federal prosecutors.

According to the U.S. Attorney's Office, the indictment against Hazelrigg also alleges that between 1997 and 2007, he kept certain business accounts secret from the IRS and other creditors.

Federal prosecutors also say that Hazelrigg used his late father's Social Security number to open bank accounts in 2009 in order to hide his assets.

According to the press release the tax evasion counts are punishable by up to five years in prison. The misuse of Social Security number counts are also punishable by up to five years in prison.

After his court appearance Monday, Hazelrigg was released with certain conditions, including refraining from gambling, and will live with his daughter on Mercer Island while awaiting his trial in October and be able travel to Palm Springs to visit his doctor, according to the U.S. Attorney's Office.