FBI raided Oakland businessman’s home based on word of informant with ‘history of fraud,’ defendant argues

David Duong, one of many Oakland businessmen indicted for allegedly bribing former Mayor Sheng Thao, is accusing federal brokers of basing their case in opposition to him on the phrase of a witness with a “decades-long historical past of fraud.”

In a single court file Late final week, Duong’s attorneys additionally accused the FBI of withholding key info from the decide who signed a search warrant final 12 months. The movement was first reported by KQED.

In June 2024, federal brokers raided the house of former Oakland Mayor Sheng Thao and her companion Andre Jones, and the properties of David and Andy Duong, the house owners of California Waste Options, town’s recycling firm. Earlier this 12 months, federal prosecutors unsealed expenses in opposition to all 4, accusing them of orchestrating an elaborate bribery scheme.

The indictment makes it clear that the FBI’s case depends closely on info from a person recognized by prosecutors as “Co-Conspirator 1.”

Primarily based on public information and interviews, Co-Conspirator 1 is believed to be Mario Juarez, a Fruitvale businessman and East Bay political insider.

Duong desires to suppress the proof collected throughout the June 2024 search of his enterprise, residence, automobile and particular person, and any proof obtained from a warrant for his cellphone information. He claims these searches have been based mostly on a nasty case and a witness – Juarez – who’s “essentially unreliable.”

To that finish, Duong is asking a federal decide to let his attorneys query the FBI agent who obtained the search warrant that allowed the FBI to grab quite a few containers of proof from his residence and workplaces. Federal brokers want a decide’s approval earlier than they’ll execute a search warrant. To get approval, they have to submit an affidavit explaining why they consider a criminal offense occurred.

That FBI affidavit has not been made public, however Duong and his attorneys have reviewed it and check with the 80-page doc extensively within the new movement.

In keeping with Duong, the decide who signed the search warrant won’t have completed so if the FBI had included details about Juarez and different particulars of their possession.

“Motivated by revenge in opposition to the Duongs”

The story federal prosecutors are telling about David Duong is that in late 2022 and 2023 he was on the middle of a scheme to bribe Thao to acquire tens of thousands and thousands price of homeless housing contracts for the corporate he and his son Andy and their enterprise companion Juarez based.

The bribery scheme started throughout the 2022 election, the FBI alleges, and throughout the last weeks of the marketing campaign the Duongs and Juarez organized for assault advert mailers to exit to voters, undermining Thao’s prime rivals. In return, Thao reportedly agreed to supply favors to the Duongs, together with promising that town would buy transport container properties from Evolutionary Houses that may function non permanent housing for the unhoused. The town by no means bought items and the partnership dissolved after a sequence of arguments between Juarez and the Duongs.

In keeping with Duong’s movement, the FBI discovered of this alleged scheme whereas investigating whether or not Juarez defrauded the printing firm that produced the election mailers. The Alameda County district legal professional filed a fraud case in opposition to Juarez in January 2024, however dropped it earlier this 12 months, calling it a “wobbler.”

In keeping with Duong, the FBI’s model of occasions is inaccurate. The 24-page movement filed by his attorneys final week makes an attempt to poke holes within the case.

Duong’s attorneys wrote that the FBI search warrant affidavit “incorporates no documentary proof linking David Duong to the alleged bribery scheme.”

Duong’s attorneys summarized a few of what the FBI specified by their affidavit as causes to consider a criminal offense was dedicated. This included textual content messages between Andy Duong and Juarez concerning the 2022 election mailers, discussions between the 2 about funds for the mailers, a $120,000 fee that an organization owned by the Duongs made to Juarez, which Juarez later repaid. Communications between Juarez and Jones have been additionally detailed within the affidavit, and in a single assertion Juarez allegedly wrote, “David Duong known as Sheng thrice with out returning her calls, is she okay?” The FBI additionally described proof of a March 2023 assembly between David and Andy Duong, Thao and Juarez.

Duong’s attorneys argued within the new movement that the FBI affidavit “alleges that David Duong might have dined with Thao, Jones and Co-Conspirator 1 (though it doesn’t allege something unlawful was mentioned); that David Duong might have acquired a telephone name from Jones about submitting a proposal to town for the sale of container properties (with out alleging a bribery dialogue); that David Duong had been concerned in a contract between Evolutionary Houses and Jones (with out proof that he did) in furtherance of a plan).”

None of this is sufficient to warrant a search of Duong’s residence, his attorneys say. “The affidavit incorporates no documentary proof linking David Duong to the alleged bribery scheme.”

Duong’s lawyer additionally highlighted Juarez’s attainable causes for accusing others of misconduct. In keeping with Duong’s attorneys, an agent revealed within the FBI affidavit that Juarez “seems to be motivated by revenge in opposition to the Duongs and a need to acquire safety from regulation enforcement by the Duongs.”

In response to an interview request, Duong’s attorneys, Edward Swanson and August Gugelmann, shared an announcement on behalf of David Duong.

“As we clarify within the movement, the federal government has based mostly its case in opposition to David Duong nearly completely on allegations made by a identified fraudster who has a grudge in opposition to the Duong household. The federal government violated Mr. Duong’s constitutional rights when it did not disclose her affiliate’s full background and false statements within the arrest warrant functions.”

Juarez didn’t reply to questions from The Oaklandside.

Duong claims Juarez lied to police a couple of capturing

In an effort to forged doubt on Juarez’s credibility, Duong’s attorneys additionally highlighted a June 9, 2024 case. to shoot that happened outdoors his residence, days earlier than the FBI raids.

In keeping with Duong, the FBI “mischaracterized the capturing as an try and assassinate Co-conspirator 1, which was orchestrated by the Duong household as a result of the Duongs allegedly discovered that Co-conspirator 1 was working collectively,” with investigators.

The capturing occurred three days after Juarez spoke to the FBI, in line with Duong’s account of the affidavit, which is partly why brokers believed the killing was coordinated by the Duong household.

The FBI didn’t instantly reply to questions for this story.

The affidavit additionally features a toll evaluation of telephone calls — exhibiting the time, length and different particulars — between Andy Duong and a telephone related to somebody recognized as JT, who reportedly has “a violent felony historical past.” Duong’s attorneys mentioned the FBI believed they may have communicated concerning the capturing.

Nonetheless, Duong’s attorneys argue that the affidavit lacks proof that Juarez falsely portrayed the capturing as a focused assault, versus “an opportunity encounter between strangers” or an try to interrupt into Juarez’s automobile. To assist this declare, Duong’s attorneys argue that the affidavit doesn’t clarify how the Duongs may have identified that Juarez had met with the FBI or was cooperating with the investigation.

The movement additionally argues that the FBI affidavit omits proof that Juarez initiated the capturing and that the incident may have been a random automobile housebreaking.

FBI affidavit omits key particulars about Juarez’s historical past of being accused of fraud, Duong says

Duong’s attorneys say the FBI included in a footnote details about Juarez’s background, together with prior arrests for theft, embezzlement, battery on a partner and inflicting harm to a partner or baby. (Most of those have been dismissed and none resulted in a conviction.) In 2024, a police report was additionally filed in opposition to Juarez by a person who accused him of failing to repay a $250,000 mortgage, however that didn’t lead to felony expenses.

Nonetheless, Duong’s attorneys argue that the affidavit didn’t embody different particulars that they are saying critically undermine Juarez’s credibility within the bribery case.

Juarez was a celebration to roughly 33 lawsuits in Alameda County between 1992 and 2022, in line with Duong’s attorneys. They argue that a few of these lawsuits ought to have been referenced within the FBI affidavit so the decide may higher assess Juarez’s credibility earlier than counting on his claims to authorize searches of Duong’s residence.

One of many instances cited by Duong’s attorneys dates again almost twenty years, when two people lent Juarez $210,000 for a biodiesel fuel project. After one of many people raised considerations about their interactions with Juarez, Juarez allegedly responded by submitting a police report accusing that particular person of assaulting him.

Duong’s attorneys say Juarez has a sample of falsely accusing enterprise associates of crime and is doing the identical with the Duongs.

Duong additionally claims the affidavit omitted “many different situations” the place there’s allegedly proof that Juarez engaged in fraud. This features a case during which Juarez allegedly defrauded town of Oakland. In 2006, Oakland sued Juarez for unhealthy religion and breach of contract for allegedly withholding greater than $30,000 in funds from collections of unpaid judgments. Juarez was reportedly ordered to pay $31,942, in line with Duong.

In keeping with Duong’s attorneys, Juarez was the topic of a cash laundering investigation in 2016 by the FBI and the U.S. Legal professional’s Workplace in San Francisco.

Duong’s attorneys argue that each one of this info and extra ought to have been disclosed to the decide who reviewed the search warrant. Its absence from the affidavit was “reckless at finest,” they wrote.

Federal Decide Yvonne Gonzalez Rogers will take into account Duong’s request, which may lead to a so-called Franks Listening to, at which the FBI agent who ready the search warrant affidavit and others could possibly be known as to testify. If the decide agrees with Duong’s attorneys, some or all the proof obtained throughout final June’s raids on Duong’s residence, administrative center, automobiles and different property, in addition to cellphone information, could possibly be withheld, which means prosecutors can not use it in opposition to him.