San Antonio Express-News (Sunday)
WIBRACHT
“He’s a talented individual who had a solid vision for a business.
That is to say, investing in very difficult projects that no one else would do at that time.”
Mayor Henry Cisneros, speaking of Michael Wibracht
alleged conspiracy, prosecutors say Wibracht and San Antonio businessman Michael Padron held out two service-disabled veterans as “the ostensible owners of Company BH” so it could qualify for set-aside contracts through the Small Business Administration.
One such set-aside program is the Service Disabled Veteran Owned Small Business, intended to increase the number of government contracts awarded to small businesses owned and controlled by disabled veterans.
With the designation, Blackhawk Ventures won more than 1,300 set-aside contracts from various government agencies over the years, a federal database shows.
Some of the bigger jobs awarded to the company:
• A $21.2 million contract to construct a parking garage at the Dallas VA Medical Center. The contract was signed in 2013.
• A $13.7 million contract for a battle command training center at Fort Sam Houston.
• A $10.3 million contract to build an access road at Fort Polk in Louisiana.
All told, prosecutors say Company BH received more than $250 million in government contracts set aside for small businesses owned by servicedisabled veterans.
Guilty pleas
By law, a small business is owned by a qualifying person when he “unconditionally owns at least 51% of the business,” according to a court filing.
One who allowed himself to be presented as the majority or sole owner of Company BH was Ruben Villareal, now 71, a Floresville disabled veteran who served in the Navy for 20 years.
Wibracht and Padron were the actual owners, according to prosecutors.
Villareal, who was the first to be charged in the alleged conspiracy, pleaded guilty in October to the same charge as Wibracht and is scheduled to be sentenced in June. He didn’t want to comment when reached Monday.
“I’m not interested, thank you,” Villareal said before hanging up.
Wibracht entered a guilty plea Feb. 12, the same day he was charged.
Sheldon Shoemaker, assistant inspector general for operations and management with the SBA, referred questions to the Justice Department. It did not respond to an email.
“Conspiring to fraudulently gain access to federal contracts set aside for small businesses owned and operated by disadvantaged individuals or servicedisabled veterans is unacceptable,” SBA Inspector General Hannibal “Mike” Ware said in a statement after Wibracht’s plea agreement.
Padron, 61, was indicted March 17 on one count of conspiracy to defraud the government and eight counts of wire fraud. He has pleaded not guilty.
Padron declined to comment, referring questions to his lawyer, Scott Noel of San Antonio. Noel had no comment and Padron’s criminal defense lawyer did not respond to a request for comment.
Insurers’ lawsuit
On July 1, more than three months before Villereal entered his guilty plea, a trio of insurance companies sued Blackhawk, Wibracht and others seeking to collect on a roughly $100,000 judgment obtained against the company in 2018.
The insurers, led by Continental Insurance Co., previously sued Blackhawk over unpaid insurance premiums on performance bonds.
During a deposition last year, Villereal said he was approached “to take over ownership”
of Blackhawk in late 2006 or early 2007 “because the company needed to be — at least the way it was explained to me at the time was that it needed to be headed by a veteran, a service disabled veteran.” Villareal never purchased an interest in Blackhawk, however. A transcript of the deposition is filed in San Antonio federal court.
The insurers alleged in their complaint that another company connected to Wibracht, Federal Management Solutions, utilized Blackhawk as a “strawman or facade to do business and obtain benefits to which they would not otherwise be entitled under applicable law.”
It couldn’t be determined if the insurers tipped off federal authorities to the alleged scheme.
A lawyer for the insurers didn’t respond to a request for comment.
The insurers allege Blackhawk fraudulently transferred assets to Federal Management Solutions and Wibracht. They want FMS and Wibracht held liable for Blackhawk’s debt. Villarreal said he was informed in 2016 that Blackhawk had no more money.
In Wibracht’s plea agreement, prosecutors say an investigation revealed that of the more than $250 million in government contracts awarded to Company BH, more than $8 million went from its bank accounts to accounts controlled by Wibracht and “Co-Conspirator 1” — believed to be Padron.
Wibracht, whose name is misspelled in the insurers’ action, said in a response to the lawsuit that Padron was the one who selected Villareal to head Blackhawk.
FMS, which did not exist until 2010, provided constructionrelated services as requested by Blackhawk, Wibracht said.
Wibracht, who is representing himself in the case, said he severed ties with Blackhawk in 2013.
The insurers aren’t likely to get their money any time soon. On Wednesday, a judge granted a 90-day stay in the case given the criminal case against Padron — who is the sole representative of FMS.
“With the concurrent criminal action based on the same facts of the civil case, there will be an issue with Fifth Amendment self-incrimination by Mr. Padron” as FMS’ only agent, a court filing by FMS stated. “Mr. Padron denies all criminal allegations and intends to contest the criminal allegations, which makes his rights under the Fifth Amendment even more imperative.”
The federal investigation appears to be ongoing.
Apartment projects
Well before Wibracht’s criminal activities surfaced, 210 Development Group moved quickly to expand its portfolio of apartment projects.