Oakland FBI raid subject linked to establishment suspected of human trafficking, selling drugs

Andy Duong has ties to cafe earlier searched by state authorities, records say.

OAKLAND — A member of the family that runs Oakland’s recycling contractor and whose home was recently raided by the FBI also was involved with a former cafe and karaoke lounge state authorities had linked to alleged drug dealing, pimping and human trafficking, records show.

Andy Duong, whose family runs recycling company California Waste Solutions, held “himself out as the proprietor” of the Music Cafe, a downtown restaurant and karaoke lounge, the records show. The business, which closed in February 2019, was linked to “straw donors” that Duong allegedly used to conceal donations to Oakland and South Bay candidates.

His Oakland Hills home was searched by federal authorities on June 20, along with residences belonging to his father David Duong and Mayor Sheng Thao, as well as the offices of California Waste Solutions.

Andy Duong has never been arrested or charged with a crime related to the 2018 Alcoholic Beverage Control investigation of the Music Cafe in Oakland’s Chinatown. The investigation of the cafe led to three arrests and two convicted of conspiracy and accessory charges.

A representative for the Duong family did not respond to specific questions about Andy Duong’s alleged ties to the 9th Street cafe, but in a general statement called the family “good citizens who always obey the law.”

“We believe that we have not engaged in or committed any illegal activities and are awaiting the decision of the law enforcement agency,” the statement said.

A man alleged to be a “straw donor” on behalf of the Duong family was arrested on suspicion of narcotics sales after a raid at the cafe.

Charlie Ngo, 35, the alleged “straw donor,” was among people who either managed, owned or were affiliated with the cafe who gave roughly $18,000, mostly to Oakland City Council candidates, between 2016 and 2018. All of them allegedly gave money on behalf of Andy Duong, who was accused of having “cash in a drawer in his CWS office” used to give to a person tasked with lining up straw donors, records filed by the Fair Political Practices Commission said. An investigation is ongoing.

Since 2019, Andy and David Duong have been under investigation by city ethics investigators for allegedly circumventing campaign finance limits by using several individuals and businesses to funnel money to candidates.

In a probable cause filing related to the straw donor investigation, Angela J. Brereton, chief of enforcement for the FPPC, wrote that Andy Duong “is affiliated with multiple businesses including … the former Sancha Bar/Music Cafe.”

Investigators with Oakland’s Public Ethics Commission wrote in a separate filing that it is “in possession of private messages in which Andy Duong holds himself out as the proprietor of the Music Cafe a/k/a Sancha Bar.”

Brereton wrote that state Assembly Member Ash Kalra told investigators that “Duong discussed his business, the Sancha Bar/Music Cafe. Kalra stated he understood Duong was an owner of this business.”

Kalra provided multiple text messages he received from Duong to investigators, including one from October 2017 about Duong’s karaoke club “where Duong tells Kalra to let him know when he would like to visit so he can set it up ‘real good for you.’ Duong also sent a photo of the karaoke room. According to Kalra, he had lunch with Duong years ago but did not discuss campaign contributions.”

“These interviews show the amount of access Duong had to candidates, the fact he hosted fundraisers even when he did not make any campaign contributions himself and the amount of knowledge Duong had regarding not making contributions during a time CWS was bidding for a contract. Further, Duong had the opportunity to promote another business, the Sancha Bar,” according to court records.

In a statement sent Friday, Kalra’s office said the FPPC filings show Kalra “fully cooperated with the FPPC in 2020 in their investigation of California Waste Solutions and Andy Duong.”

“Other than a handful of text messages and a single lunch 6 years ago as referenced in the filings, the assembly member did not have a relationship with Mr. Duong and has not returned to his establishments or interacted with him since,” wrote Kalra’s communications director, Zena Hallak.

According to a 208-page state Alcoholic Beverage Control investigative file obtained by this news organization, four undercover agents made multiple late-night visits to the cafe in 2018. Inside, they said they were able to obtain ketamine and ecstasy from the workers.

About 20 female “companions” were brought into the undercover agents’ karaoke room for them to pick from, the police record shows. The agents said they paid $100 each for the companions to join them.

The women bounced from room to room and were able to procure drugs for the agents, according to the police file. After obtaining a search warrant, agents raided the place on Oct. 4, 2018 and confiscated more than $1,000 in cash and narcotics found on the premises, police said.

Andy Duong is not named in the ABC investigation. The cafe closed four months after the raid.

Three people were arrested and charged in October 2018 with crimes related to the investigation. Alleged straw donor Ngo was ultimately charged only with two felony counts of possession for sale and sales of ketamine, charges that later were dismissed.

The two other co-defendants were not suspected of being used as straw donors.

One who originally faced 11 counts, including felony human trafficking, sale and possession of narcotics and pimping and pandering, pleaded no contest to conspiracy to commit a crime.

The other accepted a plea deal in June 2022 to being an accessory after the fact in exchange for prosecutors dropping three felony counts of possessing ketamine for sale.

According to the FPPC’s filing, Ngo did not have enough money in his bank account to make the contributions he made. For example, he gave $700 to Friends of Desley Brooks even though he only had $49.58 in his bank account; $700 to re-elect Oakland Councilman Larry Reid in 2016 despite having only $2.14 to his name and donated $800 again to Brooks, the former Oakland councilwoman in 2018 despite having $5.32.

Each time, “he made a large deposit just before or after writing his check,” city investigators said in court records. He is also listed in campaign documents as giving $700 to Oakland Councilmember Rebecca Kaplan in 2016, $700 to Oakland council candidate Viola Gonzales in 2016, $600 to San Jose Councilmember Tam Nguyen in 2017, and $250 to the campaign of Milpitas Councilmember Anthony Phan in 2016.

In all, Mayor Thao, then a councilmember, received $2,400 from people associated with the cafe, records show.

One of the cafe’s owners admitted he gave $5,000 to then-Oakland Councilmember Lynette Gibson McElhaney’s legal defense fund and $800 to then-Oakland Councilmember Abel Guillen. Those elected officials have not been accused of violating campaign finance laws.

The criminal defense attorney representing Ngo said that he “applauds any effort to hold Oakland officials accountable for their actions.”

“However, it’s crucial the public recognize the potential for these investigations to be politically motivated and disproportionately target people of color,” said attorney Curtis Briggs, who also represented Raymond “Shrimp Boy” Chow in a sprawling San Francisco public corruption case.

But even after the “straw donor” allegations, Ngo, now living in Sacramento, wasn’t done sending campaign contributions.

On Oct. 19, 2022, he sent a $500 donation to the campaign of Terry Wiley, who was then weeks away from election day in his ultimately unsuccessful bid for Alameda County District Attorney. The money was sent the same day prosecutors decided to have the case dismissed in “the interest of justice.”

Wiley said he was on voluntary leave from the DA’s office to run his campaign at the time and not involved in the case, doesn’t know Ngo and denied knowing about the donation. Wiley, who is now set to become an Alameda County judge after running unopposed in March, is not suspected of any wrongdoing.

“How am I supposed to know who’s who? I have hundreds, thousands of people who donate to my campaign,” he said in a recent interview. “I ran a clean campaign. I want to get to the bottom of this.”

Staff writers Robert Salonga and Kyle Martin contributed to this report.