FBI’s Use of Informant Tested in Corruption Case Against Oakland’s Former Mayor

When images of FBI agents carrying boxes out of Sheng Thao’s Oakland home hit the news and social media in June of 2024, it was the public’s first glimpse of a possible investigation of the then-mayor.

But records now show that agents had been working for over a year on the probe that led to the indictment of Thao, her partner Andre Jones and businessmen David and Andy Duong.

And two weeks prior to the raids, they had sat down for the first time with a man who would become a key informant in the case.

The man, referred to in a January 2025 indictment as “Co-conspirator 1,” was allegedly involved in the bribery scheme, but has not been charged. His credibility — and the degree to which federal investigators relied on his claims — has now become one of the central fault lines in the case.

He is widely assumed to be Oakland businessman and former city council candidate, Mario Juarez. Juarez did not respond to KQED’s request for comment on this story.

At the heart of the dispute is a question that could shape what evidence against Oakland’s former mayor a jury ultimately sees: Did federal agents rely too heavily on a deeply controversial informant to secure search warrants of the defendants’ homes, vehicles and businesses — or did they already have enough evidence without him?

As defense attorneys push to suppress evidence they say was tainted by incomplete information about Juarez’s credibility, the outcome could determine how much of the government’s case survives to trial.

Federal prosecutors last year charged Thao, Jones and David and Andy Duong with bribery, conspiracy and fraud. They allege Thao agreed to use her power to extend the Duongs’ recycling contract, commit the city to purchase homes from a housing company co-owned by the Duongs and appoint city officials selected by the Duongs and Co-Conspirator 1.

In exchange, the Duongs financed negative campaign mailers targeting Thao’s opponents in the 2022 mayoral election and paid Jones for a no-show job, prosecutors allege.

All four defendants have pleaded not guilty. The case is scheduled to go to trial in October.

Last year, defense attorneys began raising questions about Juarez’s past. They described a decadeslong history of fraud, including instances where they say Juarez falsely accused business partners of illegal activity in an effort to escape liability for his own actions.

Juarez did the same in this case, they allege.

“The origin of the present case is yet another [Co-Conspirator 1] fraud scheme gone wrong,” attorneys for Andy Duong wrote in a Dec. 4 filing.

Attorneys are now asking a judge to suppress evidence seized with search warrants they say rested heavily on Juarez’s claims and are calling for a hearing where they can question the FBI agents who wrote them.

Prosecutors, however, say their evidence goes far beyond Juarez’s word. They argue investigators had already built a substantial case before Juarez ever spoke to the FBI — and that at least one judge was explicitly told his statements were not required to establish probable cause.

Both sides are set to make their arguments on March 5.

Juarez’s alleged ‘counter-attack history’

Questions around Juarez’s credibility first emerged in October when David Duong filed a legal challenge called a Franks motion, accusing the FBI of not disclosing the full picture of Juarez’s background in a June 2024 search warrant affidavit.

A Franks motion is a way for a defendant to challenge a search warrant by arguing that a law enforcement officer intentionally or recklessly made false statements or left out important information in an affidavit supporting it.

According to David Duong’s attorneys, Juarez was sued approximately 33 times between 1992 and 2022, including numerous fraud cases involving former business partners. They say those cases reveal a consistent tactic: accusing others of wrongdoing when business relationships collapse.

“Even a cursory review of those matters and related press reports demonstrates that Co-Conspirator 1 has a history of diverting monies entrusted to him and accusing his business partners of misdeeds to try to discredit them and avoid paying his debts,” they wrote in the Oct. 31 motion.

In one example, the lawyers cite, attorney Sandra Raye Mitchell was working for a couple that owned a commercial real estate property in Oakland’s Fruitvale district in 2010. The clients were attempting to evict Juarez and others from the property and were suing them in federal court. During one of her visits to the property, Mitchell told police, Juarez hit her arm and ripped her jacket, causing buttons to come off.

In a request for a restraining order, Juarez alleged Mitchell had attacked him. A woman claimed in a sworn statement that she had witnessed Mitchell hitting herself and ripping off her own clothes.

A judge barred Juarez from harassing, striking or threatening Mitchell, but Juarez successfully appealed the decision on the grounds that the judge didn’t offer him or his witnesses an opportunity to speak at the hearing. Mitchell declined to comment on the case.

Thao’s attorneys point to the episode as an early example of what they call Juarez’s “counter-attack” history — a pattern of alleging misconduct by others in response to accusations and lawsuits lodged against him.

In another example, Juarez filed a restraining order against a man who sued him for fraud.

Mauro and Hilda Bucio alleged in an August 2011 lawsuit that Juarez, who had been their real estate agent, had failed to repay $220,000 the couple had loaned him.

Juarez filed a restraining order against Mauro Bucio the following year, alleging that he followed him at an event and hit him, causing Juarez to fear for his life.

James Martinez, an Emeryville-based attorney who represented the Bucios in their claim against Juarez, told KQED the assault didn’t happen.

“My client didn’t do any of that,” he said. “I think it was an anaemic attempt to gain an advantage in our litigation, but he didn’t follow through.”

In a third example, Juarez in 2024 accused then-Alameda County District Attorney Pamela Price of charging him with passing bad checks in retaliation for refusing to donate to her anti-recall campaign.

Juarez alleged that Price had pulled him aside at a gathering and said that, as DA, she could help Juarez, but that he would “need to show love and support to her” in the form of a $25,000 donation to the campaign.

“It just was ridiculous to me, the allegation,” Price said in an interview with KQED.

The case against Juarez was eventually dismissed.

“He is a very disingenuous, deceitful person who will say anything to avoid responsibility. That’s what he does. He defrauds people all the time,” Price added. “And so one would be wise to make sure that you have evidence to support anything, that you can verify what he says. And I presume that they have done that,” she said, referring to the government.

In a Jan. 14 filing, federal prosecutors pointed out that, in fact, they did have evidence to verify what Juarez had told them.

The government’s investigation revealed

Prosecutors say the FBI began its investigation in early 2023 of the alleged bribery scheme involving Thao and the others — long before agents began speaking with Juarez. They argue that Juarez did not initiate the case, but rather entered an investigation that was already well underway.

According to federal prosecutors, agents began investigating Juarez after learning he had failed to pay for a negative campaign mailer targeting Thao’s rivals in the lead-up to the 2022 election. Juarez and the Duongs at that point had gone into business together on Evolutionary Homes, a company that aimed to convert shipping containers into housing for the homeless and sell them to local governments.

But in a May 2024 911 call, Juarez alleged that a member of the Duong family had ordered a group of 10 men to assault him. Andy Duong later told a district attorney inspector a different story about that incident: that his family had walked away from their investment after Juarez only delivered two homes. Juarez, he said, had shown up at California Waste Solutions and held him and his father for hours, demanding money.

Soon after, Juarez spoke to the FBI pursuant to a proffer agreement, which allows an individual to speak with the government and not have their statements used against them in court proceedings.

“By the spring of 2024, the government had amassed a significant amount of documentary evidence tying each of the Defendants and Co-Conspirator 1 to the conspiracy, including incriminating text messages, Apple notes, calendar entries, financial records showing the corrupt payments, phone records showing significant communication among Defendants at key points relating to the agreements and payments, and other documentary evidence relating to the scheme,” it reads.

Based on this evidence alone, they wrote, two separate judges had signed off on four previous warrants for the defendants’ iCloud accounts, email accounts and cell phone location data. The government presented the same evidence when it sought the June 2024 residential search warrant.

“Co-Conspirator 1’s statements were included for merely ‘context and completeness,’ and explicitly informed the magistrate judge that these statements to law enforcement were not necessary to a finding of probable cause,” they wrote.

In a legal filing this week, Thao’s attorneys pushed back on that argument, saying that the documentary chain of evidence establishing Thao’s involvement in the scheme relies on Juarez’s text messages and notes.

Prosecutors also pointed out they had warned the magistrate judge in a multipage footnote about information relevant to Juarez’s credibility, and described his possible motivations for cooperating with the government.

They say the affidavit made clear that Co-Conspirator 1 “appears to be … motivated by revenge against the Duongs and a desire to obtain protection from law enforcement from the Duongs, among any number of other potential personal motivations he may have” and also that Co-Conspirator 1 “appears to be talking ‘with the hope of obtaining some form of leniency in exchange.”

Information about Juarez’s past that defendants claim the FBI left out of the affidavit consisted in part of “decades-old unsworn civil complaints,” news articles and other information, they wrote.

Those complaints and other materials, at most, establish “that Co-Conspirator 1 has been repeatedly accused of fraud in civil litigation over the years,” they argued. “It is a far cry, however, from the ‘decadeslong pattern of repeatedly being found liable for defrauding business partners,’ that Defendants purport it to be.”

Prosecutors admit that the FBI agent who wrote the June 14, 2024, affidavit was not aware of every detail of Juarez’s past legal issues when it was filed.

But, they argue, he was not responsible for doing the additional investigation.

Defendants “cite no precedent for the suggestion that agents must search and disclose all court records related to civil lawsuits related to informants, nor could they,” the filing reads. What’s more, they argue, given the information the government did disclose, not including every detail of Juarez’s civil litigation history, “cannot be considered to be reckless or material” — a key element of meeting the Franks standard.

The 2024 shooting

Defendants also accuse the FBI of leaving out key information about a June 9, 2024, shooting that took place in front of Juarez’s Fruitvale home three days after he first spoke with agents.

According to David Duong’s attorneys, the June 14 search warrant affidavit had framed the shooting as a possible attempt to murder Juarez, orchestrated by the Duongs because they had learned he was cooperating with the FBI.

According to prosecutors, FBI agents believed at the time that the shooting could have been a targeted attack by the Duongs.

“Given that the shooting occurred three days after Co-Conspirator 1 spoke to federal law enforcement, Co-Conspirator 1’s prior allegations that the Duongs had directed an assault on him, as well as suspicious phone tolls leading up to the shooting, the FBI believed that Co-Conspirator 1 may have been part of a targeted attack instigated by the Duongs,” the government’s filing reads.

But Duong’s attorneys allege Juarez lied to law enforcement about what happened that night in an attempt to incriminate the Duongs and save himself from his own legal troubles.

“The affidavit omits evidence, collected by the FBI immediately after the shooting, that suggests the shooting was not an assassination attempt but a botched car burglary,” they wrote.

According to the government’s filing, Juarez had initially reported to OPD and the FBI that he confronted two individuals breaking into this vehicle, one of whom shot at him, and he returned fire. Months later, FBI agents ascertained through analysis of Juarez’s interview after the shooting, surveillance footage and Shot Spotter reports that Juarez likely shot first, rather than returning fire.

When they interviewed him again, he changed his story, they said.

“During that interview, Co-Conspirator 1 stated that he shot first after another individual pointed a firearm at him, and he believed his life was in danger,” the filing reads.

Juarez said he couldn’t recall what he initially told OPD about the shooting and that he might have miscommunicated about the sequence of events.

“During that interview, Co-Conspirator 1 continued to state that he believed the shooting was orchestrated by the Duongs,” the filing states.

Despite that, prosecutors argue that even if the FBI agent had known Juarez shot first, it would not have undermined his belief that the shooting was targeted, since it took place three days after the FBI interviewed Juarez and because of Juarez’s allegation that he had been previously assaulted in an attack orchestrated by the family.

They argue that Juarez’s inconsistent statements about the shooting and the other details about his “stale civil allegations of fraud” would not have changed the judge’s decision to sign off on the warrant.

If the judge grants the Franks hearing, in order for the evidence to be suppressed, attorneys would need to prove that it’s more likely than not that the information left out was material to a finding of probable cause and that the FBI agent did not include it intentionally or with a reckless disregard for the truth.

It’s not sufficient to show that the agent made a simple mistake, Stanford criminal law professor Robert Weisberg said.

“It’s not enough to show that the [FBI agent] goofed,” Weisberg said. “It’s not enough to show that he was negligent in doing so. Rather, you have to show that the FBI agent at least strongly suspected that he was not giving information that was clearly relevant to the question of probable cause, and maybe sort of was gambling.”

In the event there is a Franks hearing, both sides could present evidence and witnesses in open court.

“This is why Frank’s hearings can be dramatic,” he said. “It comes pretty close to calling the FBI agent a liar.”