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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of Virginia

Tuesday, March 19, 2019

Former State Delegate Pleads Guilty to Defrauding United States

NORFOLK, Va. – A former member of the Virginia General Assembly pleaded guilty today to his role in a conspiracy that resulted in the fraudulent award of over $80 million in government contracts.

According to court documents, Ronald A. Villanueva, 48, participated in a nine-year conspiracy involving over $80 million in fraudulently obtained government contracts. More specifically, Villanueva 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, in or about 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.

As part of the conspiracy, 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, yet Villanueva and his co-conspirators made numerous false statements and certifications to the contrary. During part of the conspiracy, Villanueva was a member of the Virginia General Assembly, and in one instance 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. As a result of the fraud, the two companies were awarded over $80 million dollars in government contracts for which they were not eligible, and Villanueva received over $1 million in income from the companies.

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. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, Martin Culbreth, Special Agent in Charge of the FBI’s Norfolk Field Office, Carol Fortine Ochoa, Inspector General, General Services Administration (GSA), Glenn A. Fine, Acting Inspector General, Department of Defense (DoD), and Hannibal “Mike” Ware, Inspector General, Small Business Administration, made the announcement after U.S. Magistrate Judge Douglas E. Miller accepted the plea. Assistant U.S. Attorneys Alan M. Salsbury and Daniel T. Young are prosecuting the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:19-cr-2.

Financial Fraud
Joshua Stueve Director of Communications
Updated March 20, 2019