Former Virginia State Lawmaker Pleads Guilty To Contracting Fraud

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A former state lawmaker from Virginia Beach admitted Tuesday that for nearly a decade he fraudulently won defense contracts set aside for disadvantaged and minority-owned businesses.

Ron Villanueva, 48, a Republican who lost his seat in the General Assembly in 2017, pleaded guilty to conspiracy to defraud the United States. He faces up to five years in prison when sentenced July 2.

According to court documents, around 2005, Villanueva met a man named Khalil Naim who was running a struggling government contracting business with his wife. Villanueva and Naim took over the business and ran it for five years, all the while pretending that Naim’s wife was in charge, to keep getting preferential contracts for military and tactical gear. In fact, she was not even living in Virginia Beach, where the company was located.

Villanueva helped draft a misleading letter to the Small Business Administration that mischaracterized the degree to which the company relied on other suppliers, according to court documents.

The program that Villanueva and Naim exploited was meant to help small businesses get on their feet; after 2010, the company would no longer qualify. So, Villanueva admitted, he persuaded his brother-in-law, Sam Caragan, to move to Virginia Beach and be the front for a new company. Villanueva used his official House of Delegates letterhead to write to the SBA in support of the new company — not disclosing that he was actually running it, with Naim.

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