South African businessman on trial for defrauding US government

San Antonio businessman Michael Angelo Padron is not a disabled veteran. He never even served in the army.

Yet he was successful in securing millions of dollars in federal government contracts for small businesses owned by disabled veterans, a prosecutor told jurors Monday during opening statements in Padron’s criminal trial in federal court in San Antonio. .

“The evidence in this case will prove that the defendant and his business partners, for their own personal greed, used disabled veterans as figureheads – as props and puppets – so that their front company could earn tens of millions of dollars in government contracts — contracts that should have gone to businesses run by disabled veterans,” said Assistant U.S. Attorney Patrick Brown.

Padron, who owns a general business called Mapco Inc., was charged last year with one count of conspiracy to defraud the United States and eight counts of wire fraud. His alleged co-conspirators have reached plea agreements with prosecutors and will testify against him.

Santosh Aravind, one of Padron’s attorneys, told jurors his client was innocent.

“This is a case of treason,” Aravind said. “Mr. Padron is a successful businessman. He built a business from scratch. As this business grew, he hired three men to help him run this business. Betrayed by stealing money Another betrayed him by lying.

“The three men have again betrayed Mr. Padron by turning against him and falsely claiming that Mr. Padron is part of a sprawling conspiracy to defraud the government,” Aravind added.

The alleged conspiracy spanned from 2004 to at least 2017 and resulted in San Antonio construction company Blackhawk Ventures receiving contracts for disabled vets, according to the March 2021 grand jury indictment. The contracts were valued at $250 million.

Blackhawk has won more than 1,300 set-aside contracts from various government agencies over the years, according to a federal database. They included a $21.2 million contract to build a parking lot at Dallas VA Medical Center and a $13.7 million contract for a combat command training facility at Fort Sam Houston.

Blackhawk was formed in 2004 by Padron and partners Michael Wibracht and Brian Dudley.

More recently, Wibracht was known in San Antonio for adapting old, neglected buildings into apartments in parts of town that lacked affordable housing.

Through his 210 Development Group, he converted a century-old peanut factory on South Frio Street near the West Side into about 100 apartments — some that were later occupied by students from the University of Texas at San Antonio. .

On the south side, 210 Development has transformed former military barracks and a mess hall at Brooks City Base into 280-unit Aviator apartments. The pioneering developments caught the eye of former mayor Henry Cisneros, who invested with his partner Victor Miramontes in a project to transform a former seminary near Mission Concepción into apartments.

In February 2021, Wibracht pleaded guilty to conspiracy to defraud the government. Aravind said Wibracht, who served as Mapco’s chief financial officer, stole money from the company.

Wibracht and Dudley were childhood pals. Dudley served 23 years in the Coast Guard and suffered a wrist fracture that was initially misdiagnosed, qualifying him as a disabled vet.

Wibracht had called Dudley to tell him about the Small Business Administration’s Disabled Veteran-Owned Small Business Program.

Dudley became the majority owner of Blackhawk with a 51% stake, he said during his testimony as the government’s first witness. Wibracht owned 30% and Padron owned the remaining 19%.

Dudley, however, said he had no say or involvement in running the business. Instead, he was told in monthly calls what the company was doing.

In 2007, Dudley moved from California to San Antonio to join Blackhawk.

“That first phone call, Mike Wibracht had said to me, ‘Mike Padron doesn’t want you running this business. He doesn’t want you to be in charge of anything,'” Dudley testified.

He called it “the beginning of the end”, explaining that he was not going to remain a majority shareholder “on paper and put myself in danger” for committing fraud.

When Dudley left, Padron and Wibracht told Ruben Villarreal — a disabled veteran from Floresville who served in the Navy for 20 years — that he would take over as majority owner of Blackhawk, Brown said.

“When Ruben Villarreal took over Brian Dudley’s stake in Blackhawk, he didn’t pay any money – not $1 – to become a majority owner of an existing business,” Brown said.

Villarreal had worked at Mapco before Blackhawk. He was the first defendant in the alleged conspiracy, pleading guilty in 2020 to the same charge as Wibracht. They are both due to be sentenced in October.

Aravind countered that Padron relinquished his ownership of Blackhawk in 2007.

“We’re going to show you evidence that contradicts the government’s story that Ruben was just a rubber stamp for Mr. Padron,” Aravind told jurors.

U.S. District Judge Xavier Rodriguez is presiding over the trial, which is expected to last about 10 days.

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