A former member of the Virginia House of Delegates faced a judge Thursday, accused of making false, fraudulent and misleading statements to the Small Business Administration.
Ron Villanueva, who served as a delegate between January 2010 and January 2018, is charged with conspiracy to defraud the United States, falsification of records and aiding and abetting false written statements.
According to court documents, Villanueva took on a leadership role at a small business, SEK Solutions, LLC, when the business relocated to Virginia Beach in 2005. The business was originally owned by a husband and wife, but the wife's role decreased until she "ceded practically all control of SEK" to her husband and Villanueva.
Despite the woman no longer being involved in the company, Villanueva and the woman's husband used her "disadvantaged" status as a woman to receive money from the SBA's 8(a) program, which aims to help small, disadvantaged businesses compete in the economy through business development.
"Under the 8(a) program, small businesses owned and controlled by economically and socially disadvantaged persons are eligible to obtain various kinds of SBA assistance and to receive certain preferences in the award of federal contracts," according to court documents.
While still involved with SEK Solutions, Villanueva met with a relative by marriage in 2007, who court documents say he and his co-conspirator convinced to begin a new business. Documents listed the relative by marriage as the owner of the new company, Karda Systems, LLC, but court documents say that he had no meaningful role in managing it and that Villanueva and his co-conspirator took over.
Karda also applied to the 8(a) program due to the relative by marriage's disadvantaged status, and received its certification in December 2010.
Villanueva, his co-conspirator and SEK Solutions received the profits from Karda, extracting money through rent, consulting fees and other "business-related" expenses.
Records show that between 2011 and 2014 Karda was awarded more than $20 million in 8(a) contracts, while SEK Solutions was awarded more than $60 million.
Villanueva's attorney, Thomas Bondurant, Jr., issued the following statement Thursday, saying he was "surprised" by the former delegate's indictment:
We have learned today that Mr. Villanueva was indicted in Norfolk. We were surprised by this development and look forward to our day in court. For over 15 years, Ron was a dedicated public servant in local and state government and a respected leader in his community. We have no further comment at this time.
Villanueva was released on a $10,000 unsecured bond. He pleaded not guilty on January 17.
Villanueva's jury trial is scheduled for June 4 at 11 a.m.
To read the full indictment, click here.