Developer avoids a prison sentence

Blackhawk Venture owners held two vets as ostensible owners to qualify for contracts

One-time San Antonio apartment developer Michael Wibracht has avoided prison time for his role in conspiring to defraud the federal government.

U.S. District Judge Xavier Rodriguez on Wednesday sentenced Wibracht to two years of supervised release and ordered him to pay a $2,000 fine. The judge also prohibited him from engaging in any government contracts.

The sentencing guidelines recommended, but did not require, imprisonment of 12 to 18 months.

Wibracht was the third and final defendant to be sentenced for conspiring to obtain more than $240 million in government contracts intended for service-disabled veteran-owned small businesses.

Also on Wednesday, Rodriguez sentenced co-conspirator Ruben Villarreal to time served. Villarreal had been under pretrial supervision for about 30 months.

San Antonio construction company owner Michael Angelo Padron, also part of the conspiracy but the only defendant to go to trial, in January received a 27-month prison sentence. In June, a jury found him guilty of conspiracy to defraud the United States and six counts of wire fraud. He was found not guilty of two wire fraud counts.

Padron, 63, also was ordered to pay a $250,000 fine on each count for a total of $1.75 million. In addition, he must serve three years of supervised release after his prison term ends. He has filed notice that he intends to appeal his conviction and sentence. Both Wibracht, 49, and Villarreal, 72, pleaded guilty rather than stand trial.

“I take full responsibility for my role and what has transpired,” Wibracht said in apologizing to the court and the government. “It was very, very difficult the past several years.”

He became known for adapting old, neglected buildings for apartments in parts of San Antonio that lacked affordable

housing.

Over the past decade, Wibracht’s 210 Development Group converted a century-old peanut factory on South Frio on the West Side into about 100 apartment units. On the South Side, 210 Development turned some old military barracks and a dining facility at Brooks City Base into the 280-unit Aviator Apartments.

It all was short-lived, however,

with the trailblazing developer becoming unemployed, bankrupt and a convicted felon.

The criminal case is unrelated to Wibracht’s time with 210 Development. Rather, the case had to do with his part ownership in multiple construction companies, including one known as Blackhawk Ventures.

Over the the course of the alleged conspiracy, prosecutors said Wibracht and Padron held out two service-disabled veterans as “the ostensible owners” of Blackhawk so it could qualify for set-aside contracts through

the Small Business Administration.

Villarreal — a Floresville disabled veteran who served in the Navy for 20 years — was one of the ostensible owners. But prosecutors said Wibracht and Padron exercised financial and operational control over Blackhawk — disqualifying it for contracts meant for small businesses owned and controlled by service-disabled veterans.

“I never once in the entire time that I was running the company did I ever have any

idea or any clue that there was anything illegal going on,” Villarreal told the judge.

Villarreal’s lawyer said his client simply followed Padron’s orders.

“Ruben Villarreal was a pawn,” said attorney Alfredo Villarreal. “If you’re going to use derisive language, he was a stooge, a lackey, a flunky, fall guy.”

Blackhawk Ventures won more than 1,300 set-aside contracts from various government agencies over the years, a federal database shows. Prosecutors

said the conspiracy ran from 2004 through at least late 2017, though Wibracht’s lawyer told the judge his involvement ended in 2013.

More than $8 million from the government contracts was paid from Blackhawk’s bank accounts to companies controlled by Padron and Wibracht, according to the latter’s plea agreement.

At his sentencing, Padron placed blamed for the scheme on Wibracht.