NORFOLK, Va. — A former state delegate has pleaded guilty to a federal charge of conspiracy to defraud the United States over $80 million.
Ron Villanueva, 48, had faced several federal charges surrounding an alleged bid-rigging scheme, but according to his attorney, all charges will be dropped except for the one guilty plea.
Court documents said that Villanueva participated in a nine-year conspiracy involving over $80 million in fraudulently obtained government contracts. He said he conspired with others to help two Virginia Beach companies secure Small Business Administration contracts that had been set aside for minority-owned businesses.
Villanueva began working for one company, SEK Solutions, around 2005. When that company’s 8(a) status was set to expire in 2010, Villanueva and his co-conspirators set up a new company, Karda Systems, which on paper was run by Villanueva’s brother-in-law. However, in reality, Karda’s contracting business was managed by Villanueva and others associated with SEK.
Court documents also said that part of the conspiracy included Villanueva and others misrepresented whether SEK and Karda were eligible for government contracts under the 8(a) program. In fact, neither company was eligible to participate in the program.
During part of the conspiracy, Villanueva was in the Virginia General Assembly. In one instance, he used his House of Delegates letterhead to send a letter to the SBA in support of Karda’s application to participate in the 8(a) program, knowing that it contained false and misleading statements about who actually operated the company.
Villanueva served as a Republican for the 21st District in the House of Delegates from 2010 to 2018. Before that, he was a member of Virginia Beach's city council.
As a result of the fraud, the two companies were given over $80 million in government contracts.
Earlier this month, Villanueva indicated he hoped to arrange a plea agreement. In a statement released Tuesday, Villanueva apologized for his actions and said he agreed "to cooperate with the United States Eastern District Attorney's office."
"I accept full responsibility and understand the consequences of my actions," Villanueva wrote.
Villanueva faces a maximum penalty of five years in prison when sentenced on July 2. Actual sentences for federal crimes are typically less than the maximum penalties.