WASHINGTON – Two Texas construction companies pleaded guilty to a longstanding plot to defraud the United States.
Michael Wibracht of San Antonio, Texas, the former owner of several construction companies, has pledged to defraud the United States to obtain valuable government contracts under programs administered and for by the US Small Business Administration (SBA) which neither he nor his co-conspiratorial firms were eligible for. A co-conspirator, Ruben Villarreal, also from San Antonio, pleaded guilty on November 20, 2020 of participating in the same conspiracy.
“This conspiracy has undermined the integrity of the federal procurement process for many years,” said Richard A. Powers, Assistant Attorney General, of the Justice Department’s Antitrust Division. “This behavior stole opportunities for honest businesses, especially those belonging to historically disadvantaged people and veterans with disabilities.”
According to court documents filed in the western district of Texas in San Antonio, Wibracht, Villareal, and other co-conspirators conspired to defraud the United States by disrupting the operation of the SBA and already fraudulently receiving money from United States agencies in the framework that program was installed by the conspirators Villareal, a disabled veteran, as the alleged owner of a general construction company run as a Disabled Veterans Small Business (SDVOSB). However, Wibracht and other co-conspirators exercised disqualifying financial and operational control over the construction company. The conspirators hid this control in order to obtain government contracts worth over $ 250 million that were “reserved” for SDVOSBs to aid their larger, unskilled businesses. The SBA administers the SDVOSB program, which aims to increase the number of government contracts awarded to small businesses owned and controlled by disabled veterans. To qualify as an SDVOSB, a company must, among other things, be owned and controlled by a disabled veteran.
“The conspiracy to fraudulently gain access to federal contracts intended for small businesses owned and operated by disadvantaged individuals or disabled veterans is unacceptable,” said Inspector General Hannibal “Mike” Ware. “The confessions of guilt send a strong message that those responsible will be held accountable. I would like to thank the Antitrust Department and our law enforcement partners for their support and dedication to seeking justice on this case. “
“These pleading agreements show the unique expertise of the CID special unit of the US Army, the Major Procurement Fraud Unit,” said the responsible special agent Ray A. Rayos of the Southwest Fraud Field Office of the Major Procurement Fraud Unit of the US Army Criminal Investigation Command . “Together with our partner agencies and the Justice Department Antitrust Division, those responsible for a complex and long-standing fraud program against the United States government have been brought to justice.”
“The Inspector General’s General Services Administration Office is committed to working with its law enforcement partners and the Justice Department’s Antitrust Division to ensure that individuals and companies fraudulently contracting for legitimate small and disadvantaged businesses are fully investigated and prosecuted Law, ”said Inspector General Carol Ochoa of the General Services Administration.
“This result is testament to the commitment of the Defense Criminal Investigative Service (DCIS) and our law enforcement partners in maintaining the integrity of the DoD contract process,” said Gregory P. Shilling, assistant special adviser for the DCIS Southwest field office. “DCIS will use all available resources to investigate allegations of fraud and corruption and bring those to justice who seek to enrich themselves through the use of small business management programs designed to help disadvantaged groups.”
Wibracht pleaded guilty to conspiring to commit wire fraud and to defraud the United States. Villarreal pleaded guilty to conspiracy to defraud the United States and is due to be tried before Judge Xavier Rodriguez on June 23, 2021. Both men face a maximum sentence of five years in prison and a fine of $ 250,000. The maximum penalty for a person can be increased to double the profit from the crime or double the loss suffered by the victims of the crime if either of these amounts is greater than the maximum legal penalty. A federal district judge determines each sentence based on U.S. sentencing guidelines and other legal factors.
The Inspector General’s SBA Office, the Army Criminal Investigation Command’s Procurement Fraud Department, the Inspector General’s General Services Administration Office, the Inspector General’s Department of Veterans Affairs Office, and DCIS are investigating the case with assistance from the US Attorney’s Office for the West District of Texas and the Army Audit Agency.
The Justice Department’s Antitrust Division Washington Criminal II is pursuing the case. Special thanks go to U.S. Assistant Attorney William F. Lewis Jr. of the U.S. Attorney’s Office for the Western District of Texas.
Individuals with information related to this investigation are asked to call the Washington Criminal II Section of the Antitrust Division at 202-598-4000 or at https://www.justice.gov/atr/contact/newcase.html visit.
In November 2019, the Justice Department created the Procurement Collusion Strike Force, a joint law enforcement effort to combat antitrust crimes and related fraudulent activities that affect the procurement and funding of grants and programs at all levels of government – federal, state and local Level. Further information can be found at https://www.justice.gov/procurement-collusion-strike-force.