OAKLAND — A federal grand jury has indicted Oakland’s recalled mayor Sheng Thao, a source with knowledge of the investigation told this newspaper — a stunning development to a federal public corruption inquiry that touched the highest levels of East Bay’s political class.
The indictment caps a monthslong federal grand jury inquiry that shook the region’s political circles just months ahead of a recall election targeting the first-term mayor. Thao was booted from office by more than 60% of voters in November.
Reached early Thursday afternoon, Thao’s attorney, Jeff Tsai, said he and his client had not been contacted by the U.S. Attorney’s Office, and they were unaware of any movement in the federal investigation.
The development comes just a day after FBI agents raided the home of another East Bay politician, San Leandro City Councilmember Bryan Azevedo, who, along with Thao, was among several officials who visited Vietnam as part of a trade delegation two years ago.
The original inquiry burst into public view June 20 when agents with the FBI, the Internal Revenue Service and the U.S. Postal Service raided four addresses across the city, including Thao’s home in the Oakland Hills that she shared with her partner, former City Hall council aide Andre Jones. Also raided were the homes and waterfront business offices of David and Andy Duong, the father-son duo who own and operate the city’s recycling contractor, California Waste Solutions.
The raids sent shockwaves throughout Oakland, leading to revelations of an alleged assassination attempt targeting a suspected FBI informant, alleged backroom election-season dealings and accusations of a sprawling “straw donor” scheme aimed at elevating politicians viewed as favorable to the Duongs and their recycling empire.
Thao has long proclaimed her innocence — declaring in a City Hall press conference days after the raids that “I will not be bullied,” while maintaining that “I am confident I will not be charged with a crime, because I am innocent.” Speaking through tears, she stressed the FBI’s investigation was “not about me,” while insinuating that the raids were somehow linked to the broader political forces seeking to remove her from office.
The entire situation “wouldn’t have gone down the way it did if I was rich, if I had gone to elite private schools, or if I had come from money,” Thao said at the press conference in late June.
The Duongs have also denied wrongdoing — issuing a statement over the summer emphasizing how they were “very surprised” by the FBI’s searches, and that they “have not engaged in or committed any illegal activities.”
Federal officials initially appeared to cast a wide net — issuing subpoenas to Oakland city attorneys that sought documents related to the former Oakland Army Base, local homelessness initiatives and Evolutionary Homes LLC, an obscure homebuilder partly founded by David and Andy Duong. Also requested were a slew of documents regarding Jones, Thao’s decade-long romantic partner, along with city policies on retaining and destroying documents.
The inquiry later needled its way into the Oakland Police Department, where federal investigators sought OPD internal phone number directories, as well as police reports related to the Duong family and an apparent falling out with Mario Juarez, who co-founded the housing company with the Duongs.
The Duongs’ involvement appeared to echo another scandal that ensnared a different Bay Area mayor nearly 20 years ago.
Their company — which also provides curbside recycling pickup services in San Jose — played a tangential role in the 2006 indictment of San Jose’s then-mayor, Ron Gonzales, on bribery charges. Prosecutors alleged a conspiracy to help Norcal Waste Systems secure a lucrative trash hauling contract amendment. California Waste Solutions was a subcontractor for Norcal at the time.
A judge later tossed the charges against Gonzalez, citing errors given to the grand jury. CWS later ended up with the San Jose city contract.
Since then, the family’s political maneuverings have come under a harsh spotlight.
In recent years, state campaign finance regulators and Oakland’s ethics watchdog accused the Duong family of orchestrating a yearslong campaign to secretly funnel thousands of dollars to numerous political candidates across the Bay Area, all in violation of campaign finance laws. The politicians whose campaigns allegedly benefitted from the scheme included Thao and former Oakland City councilmembers Rebecca Kaplan, Dan Kalb, Larry Reid and Lynette Gibson McElhaney.
In one instance, the regulators cited an internal email for Thao’s city council campaign in 2018, detailing how one staffer wanted to request money from the Duongs. The email came a mere week before Thao’s campaign received 14 suspicious donations believed to come from the Duongs and their network of “straw donors,” a regulatory complaint said.
Regulators also claimed Andy Duong sought ties with several other politicians over the years, including California’s now-Attorney General Rob Bonta, who was viewed by the family as an “ally,” and someone who would “deliver whatever we ask for.” His political schmoozing included a trip to the Philippines with Bonta — while Duong was under investigation and Bonta was AG — and handshake pictures with a who’s who of local and national politicians, including the last two Democratic U.S. presidents.
In December, a bombshell court filing by the Alameda County District Attorney’s Office claimed the Duongs and another city contractor paid hundreds of thousands of dollars around the time of the November 2022 election to Juarez, then a political operative. Their alleged goal: Elect Thao to office and maintain their lucrative contracts with the city.
“These companies have valuable contracts with the city of Oakland, and an interest in the election of then-candidate for mayor, Sheng Thao,” Senior Assistant District Attorney Kwixuan Maloof wrote in the motion. To that end, Maloof added that Juarez was “a conduit for these companies to help the mayor win and preserve and enhance the companies’ access to taxpayer-funded contracts.”
At least some of the $295,000 in payments funded controversial mailers designed to attack Loren Taylor, Thao’s biggest opponent in the 2022 election, and another mayoral candidate, former Councilman Ignacio De La Fuente, the filing said.
Also alleged was a $7,500 payment to Jones, Thao’s live-in boyfriend, whose employment history since 2021 has remained a mystery. Thao and Jones met while they worked for former Councilmember Kaplan — he as chief of staff, she as an intern.
Juarez had been a business partner with the Duongs, until a bitter falling out in spring 2024, when the Duongs accused Juarez of defrauding them and failing to deliver on their $1 million investment in their housing company, court records show. The dispute led to dueling claims that each side assaulted the other during a May 3 confrontation outside the California Waste Solutions’ headquarters on Embarcadero.
A month later, Juarez’s Fruitvale District home was shot up in what authorities say was a failed assassination attempt. The federal raids happened 11 days later.
Himself a two-time Oakland City Council candidate, Juarez is believed to have spent much of 2024 cooperating with federal authorities in their public corruption campaign.