NORFOLK — A grand-jury indicted ex-delegate Ron Villanueva Wednesday on charges of conspiracy to defraud the U.S. Government, falsifying records, and aiding thereof.
Villanueva was arrested in Chesapeake and also made his first appearance in Norfolk’s federal court Thursday.
The charges relate to Villanueva’s work with SEK Solutions LLC. Federal prosecutors said Villanueva and unnamed co-conspirators “made numerous false, fraudulent, and misleading statements to the Small Business Administration regarding (i) SEK’s eligibility for participation in the 8(a) program,” as well as the company’s relationship with a supplier.
The SBA 8(a) is a federal program which provides contracting advantages for companies owned by “socially and economically disadvantaged people or entities,” according to the SBA website. Eligible businesses must be 51 percent owned by one or more women.
The indictment claims Villanueva and the co-conspirators secretly controlled SEK, making the company not majority-owned by women. When SEK’s term in the program expired, the indictment claims that Villanueva and co-conspirators created a new company, Karda, for the sole purpose of fraudulently obtaining sole source contracts through the 8(a) program, and secretly controlled the company to retain eligibility.
According to federal procurement records cited in the indictment, SEK was awarded more than $60 million in 8(a) contracts between 2005 and 2010.
The indictment claims Villanueva directed Conspirator-1 to pay a portion of the income generated from SEK into the bank account of one of Villanueva’s immediate family members rather than directly into Villanueva’s account. According to bank records cited in the indictment, during the period between 2007 and 2014, Viilanueva and his immediate family member received approximately $1,040,000 in income from SEK and Karda.
Neither Villanueva nor the U.S. attorneys prosecuting the case were immediately available for comment.
Villanueva served in the Virginia House of Delegates between 2010 and 2018, representing Virginia Beach. He was released on $10,000 unsecured bond Thursday, and is barred from leaving the state.
His arraignment is scheduled Jan. 17, according to court records.