Sheng Thao and partner Andre Jones sought more than $300,000 in bribes, feds allege

Former Oakland Mayor Sheng Thao, her partner Andre Jones, and city contractors David and Andy Duong have been indicted for conspiracy, bribery, and other charges associated with an alleged “pay-to-play” scheme.

The US Attorney’s Office and other federal authorities delivered the bombshell announcement Friday morning after a months-long, sprawling — and ongoing — FBI investigation.

The indictment alleges that Thao and Jones accepted bribes from the Duongs in exchange for promising to extend their recycling services contract with the city and purchase modular housing units from a company the Duongs ran if Thao was elected in 2022. The Duongs own California Waste Solutions, which has a multi-million-dollar contract with Oakland to provide curbside recycling services, and the company has a deal to take over part of the old Oakland Army Base to build a new recycling center.

The Duongs allegedly paid $75,000 for mailers attacking Thao’s opponents in the 2022 election, the government says. They also promised $300,000 to Jones for a “no-show” job, and allegedly paid him $95,000 in cash after the election.

Thao pleaded not guilty at an arraignment later Friday morning.

“The mayor looks forward to defending herself against these charges, showing that there is in fact no evidence to support these charges,” said her attorney Jeff Tsai, speaking outside the courthouse.

Jones and his attorney Walter Riley didn’t immediately respond to messages.

Andy Duong’s attorney, Winston Chan, issued a statement shortly after the indictments were unsealed, saying Duong is innocent.

“We have kept quiet despite the media frenzy of the past months in the hope that the government would correctly come to see through objective investigation that the allegations are baseless, and being fanned by nothing more than gossip and supposition stitched together by the fabrications and delusions of those who lack all fundamental credibility,” Chan said. “But disappointingly, Andy instead is today the most recent in a long line of Asian Americans who unfairly are singled out and forced to pay a price for daring to be active in the political sphere.”

Lawyers for California Waste Solutions also sent a statement shortly after Friday’s announcement saying the company will continue to cooperate with the investigation.

“The company has not been charged and does not expect that it will be, as it has never authorized any improper payments nor sought or received any improper government benefits,” they wrote. The attorneys said the recycler plans to fulfill its contract with Oakland, which lasts until 2034, and to press ahead with the construction of its new facility at the old army base.

It has been clear since June that the FBI has been investigating Thao, Jones, the Duongs, and a complicated web of people and businesses they were affiliated with. On June 20, the FBI and other federal law enforcement agencies raided the Oakland Hills home where Thao and Jones live, as well as three properties associated with the Duongs. A few days later, the FBI issued subpoenas to city officials naming the four people who were indicted and several others.

“The public needs to know it can trust those in charge of City Hall to work for the public interest,” said First Assistant US Attorney Patrick D. Robbins at a press conference Friday. Robbins is in charge of this case because US Attorney for Northern California Ismael Ramsey had to recuse himself from the investigation. The office declined to answer questions about the reason for the recusal or when Ramsey was recused. 

Robbins said the US Attorney’s Office began looking into the Oakland case after the city’s Public Ethics Commission brought the corruption allegations to federal authorities. The commission has been carrying out its own investigation into an alleged straw-donor scheme facilitated by the Duongs, whom they accuse of illegally funneling campaign cash to a long list of local and state politicians.

Since the June raid, Thao has adamantly maintained her innocence, often telling reporters that she was not the target of the FBI’s probe. Thao was recalled from office in November by voters frustrated with crime and the city’s flagging local economy, and the FBI raids may have played a role in turning the public against her.

Several supporters of the recall attended the press conference or came to the federal building where it was held in San Francisco, including landlord Tuan Ngo, mayoral candidate Mindy Pechenuk, and activist Seneca Scott. Ngo, who was carrying several protest signs, was ushered out of the conference, which was a closed event for press only.

A homeless housing company run by Andy Duong and Oakland businessman Mario Juarez, Evolutionary Homes, has been a focus of the investigation. Prosecutors allege that Thao promised to hand multi-million dollar contracts to Evolutionary Homes. “Thao proposed using the city of Oakland’s emergency powers to make it easier to buy the housing units on behalf of Oakland, without needing to use a competitive bidding process,” the indictment alleges.

The indictment includes text messages between Juarez, identified by prosecutors as an anonymous “co-conspirator,” and Andy Duong from October 2022. In those messages, Juarez reported that Thao “will buy 100 units,” if she becomes mayor.

“Guaranteed?” asked Duong.

“Sheng is going to call you re $$” Juarez later texted. 

The indictment alleges that Thao, Andy Duong, and Juarez “finalized the bribery scheme” at a fundraiser a few days later, where Thao agreed to purchase housing from the company, appoint Duong’s choice for a high-up city official, and extend a contract for California Waste Solutions, if she was elected.

About a month later, after Thao narrowly won the race for mayor by 677 votes, the co-conspirator and Duong exchanged a few more texts.

“So we may go to jail…But we are $100 million dollars richer,” Juarez allegedly wrote.

“Money buys everything,” Duong replied.

“As is often the case, the accused left a money trail for their deceptive acts of corruption,” said IRS criminal investigator Linda Nguyen at Friday’s press conference.

Federal authorities say the investigation is ongoing but declined to share whether more indictments are expected. 

However, earlier this week, the FBI raided the home of San Leandro City Councilmember Bryan Azevedo, who went on a trip to Vietnam with Thao and the Duongs in 2023, and who sought an Evolutionary Homes contract in his city.

This is a developing story. Check back for updates.