Recycling company CEO among those indicted in Oakland, California, bribery case

An eight-count indictment was unsealed Friday, Jan. 17, charging former Oakland, California, Mayor Sheng Thao, who was recalled from office in November of last year, her romantic partner Andre Jones and local businessmen David Trung Duong and Andy Hung Duong with bribery offenses. Andy Duong also was charged with making false statements to government agents.

Thoa’s term, which lasted less than two years, included rising incidents of street crime and retail theft, the controversial firing of Oakland's former police chief, the loss of the Oakland Athletics Major League Baseball team, a looming budget deficit and a raid on her home by the FBI, which also raided the offices of California Waste Solutions.

The indictment charges each defendant with one count of conspiracy to commit bribery in violation of 18 U.S.C. § 371; one count of bribery concerning programs receiving federal funds in violation of 18 U.S.C. § 666(a)(1)(B) or 18 U.S.C. § 666(a)(2); one count of conspiracy to commit honest services mail and wire fraud in violation of 18 U.S.C. § 1349; one count of honest services mail fraud in violation of 18 U.S.C. §§ 1341, 1346; and two counts of honest services wire fraud in violation of 18 U.S.C. §§ 1343, 1346.  Andy Duong was also charged with one count of making false statements to government agents in violation of 18 U.S.C. § 1001(a)(2).

According to the indictment filed Jan. 9, in the weeks leading up to the Oakland mayoral election in November 2022 and following her election as mayor, Thao promised to take official actions to benefit the Duongs in exchange for the businessmen providing various benefits to Thao and Jones. David Duong is CEO of California Waste Solutions, a recycling company that provides residential recycling collection services to Oakland single- and mulitfamily households, and the chairman and co-owner of a housing company formed to develop and manufacture prefabricated modular homes. Andy Duong, David Duong’s son, is an employee of the recycling company and also a founder and co-owner of the housing company.

According to the indictment, Thao allegedly promised to commit the city of Oakland to purchase housing units from the Duongs’ housing company, extend the city’s contract with the Duongs’ recycling company and appoint city officials selected by the Duongs. In exchange, David and Andy Duong allegedly promised to and did fund a $75,000 negative mailer campaign targeting Thao’s opponents in the mayoral election and made $95,000 in payments to Jones for a no-show job with their housing company, with the promise of additional payments, all intended for the benefit of Thao and Jones.

Once Thao became Mayor of Oakland in January 2023, she allegedly took steps to further the relationship with the Duongs, including using her influence to help appoint a high-level Oakland official selected by the Duongs and requesting that members of her staff meet with and tour the Duongs’ housing company, the indictment says.

The East Bay Times identified the alleged individual whom Thao appointed as Larry Gallegos, a project manager for the Economic and Workforce Development Department. In a statement to ABC7 News Jan. 21, the city of Oakland confirmed that Gallegos resigned Jan. 17.

Thao allegedly benefitted from the payments the Duongs made to Jones, according to a news release from the U.S. Attorney’s Office for the Northern District of California. Financial records indicate that before Jones began receiving payments through the bribery scheme, Thao either paid the entirety of or split the rent with Jones for their shared residence. Starting in January 2023, soon after Jones began receiving payments as part of the bribery scheme, Jones began paying the entirety of their rent. Also beginning that month, Jones increased his contribution to, or paid the entirety of, shared bills with Thao, including household utility bills and mobile phone bills.

Defendants allegedly took steps to conceal their bribery scheme through a number of actions, according to the U.S. Attorney’s Office, that included, at Thao’s direction, making the bribe payments to Jones to avoid a paper trial to Thao; misrepresenting that Jones had a legitimate job with the Duongs’ housing company to mask the bribery payments; creating false invoices for the bribe payments from the Duongs’ recycling company; and failing to disclose benefits received on California Form 700, Statement of Economic Interests.

Oakland’s recycling contract with California Waste Solutions, ABC7 reports, dates back to July 2015. The 20-year service contract has an option for two five-year extensions, adding up to the 10-year extension the Duongs wanted Thao to get them as indicated in the indictment.

The city settled with the company in December 2021 after years of litigation that began in 2017 to recover approximately $6 million for Oakland taxpayers in overcharges for bringing recycling carts at multifamily buildings out to the curb (backyard service). The settlement required CWS to refund approximately 2,000 multifamily building owners for those years of overcharging and lower their rates for backyard service for recycling carts going forward.

Local press reports note that Thao, Jones, David Duong and Andy Duong all pleaded not guilty at their arraignment Jan. 17, posted bail and were released.

If convicted, the defendants face a maximum sentence of 20 years in prison for each count under 18 U.S.C. § 1349, 18 U.S.C. § 1341 and 18 U.S.C. § 1343; a maximum sentence of 10 years in prison for each count under 18 U.S.C. §§ 666(a)(1)(B) and (a)(2); and a maximum of five years in prison for the count under 18 U.S.C. § 371. Andy Duong also faces a maximum sentence of five years in prison for the count under 18 U.S.C. § 1001.