‘They Wanted to Win’: Government’s Star Witness in Thao Trial Appears to Describe Past Bribes

In his first hour of testimony Friday, the star witness in Sheng Thao’s Oakland corruption trial — who defense attorneys have called a “consummate hustler” with a “decades-long history” of fraud — alleged one of the defendants handed out “bags of cash” in the past to at least one elected official and another’s staffer.

Mario Juarez, an Oakland businessman and political operative, has pleaded guilty to participating in an alleged scheme to bribe Thao in exchange for a city contract for his housing startup, Evolutionary Homes. He’s agreed to testify on behalf of the government in hopes of a lighter sentence. 

Juarez told the jury about his early business relationships with recycling executive David Duong and his son Andy Duong. They’re facing conspiracy, bribery and fraud charges in an alleged quid pro quo, alongside Thao and her former romantic partner Andre Jones. 

Throughout the trial, defense attorneys have repeatedly called into question Juarez’s credibility, describing a history of falsely accusing other people when his own business ventures sour and pointing to numerous lawsuits Juarez has been involved in — 33 between 1992 and 2022 — including fraud cases involving former business partners. When KQED previously asked attorneys for David and Andy Duong about Juarez’s allegations about distributing cash to elected officials, an attorney for David Duong declined to comment and lawyers representing Andy Duong did not respond.  

Assistant U.S. Attorney Abraham Fine told the jury in his opening statement that Juarez is “no angel,” but that his testimony will line up with thousands of texts, audio recordings and taped phone calls they’ve introduced in evidence. 

Prosecutors allege the Duongs agreed to provide financial support for Thao’s 2022 mayoral run and give Jones a no-show job for $300,000 at Evolutionary Homes. In return, prosecutors say that in addition to the contract for Evolutionary Homes, Thao allegedly agreed to help elevate city staffers to director level positions in City Hall at the Duongs’ and Juarez’s request and help the Duongs’ other business, California Waste Solutions, with city deals. 

Juarez told the court that he met recycling executive David and Andy Duong around 2008, when he was first running for Oakland City Council, and that he and the family had formed an amicable working relationship. 

He said after the family supported his two unsuccessful council bids, in 2008 and again in 2012, he helped them lobby for Oakland’s curbside recycling contract in 2014. 

“They were the underdog at the time,” he told the court. “And they wanted to win.”

Ultimately, California Waste Solutions was selected against city staff’s recommendation, Juarez said. The company won the contract in a controversial 7-1 vote in August 2014. Councilmember Noel Gallo cast the sole no vote, according to city records. 

The following day, Juarez testified, a number of people lined up outside the California Waste Solutions’ office to talk to David Duong. He said some came to congratulate him, while others “were there to collect money.”

Juarez said he loaded cash into gym bags, including one with up to $300,000, and helped David Duong distribute them to those people, including a sitting city council member and another person who he said came on behalf of a “sitting councilwoman.”

Juarez told the court that in the months after California Waste Solutions won the 2014 contract, another company who entered a bid wanted to overrule the decision by putting a referendum before  voters. 

Juarez said he helped the Duongs’ work to block those efforts, in one instance getting into a shoving match with someone collecting signatures for the potential ballot measure.

“After the shoving match… David Duong asked me ‘What did I want?’” Juarez recalled. “I told him I don’t want any cash, I wanted to do business with him.”

They did start working together in 2022, when Juarez and the Duongs cofounded Evolutionary Homes, which aimed to turn shipping containers into housing for people exiting homelessness. They spent the following years seeking contracts with various cities and counties around the Bay Area, including Oakland.

But by the spring of 2024, the cofounders’ relationship began to fray. Despite the deal they allegedly made with Thao and Jones more than a year prior, the city of Oakland still had not signed a contract to purchase housing units from the company, and Evolutionary Homes did not have units ready for market. 

In court filings, prosecutors say Juarez, upset that he had not been reimbursed for funding he said he put into the company, asked the Duongs to dissolve their partnership. The Duongs threatened to sue Juarez, alleging they’d fronted $800,000 for the business, and he had not followed through on a promise to deliver completed container homes. 

At that point, prosecutors allege Juarez threatened to go to the police. 

“It got messy, and then it got really messy,” Fine told the jury during his opening statement. 

On May 3, 2024, Juarez arrived at the Evolutionary Homes’ office to find that he was locked out, spurring an altercation between him and the Duongs that turned violent. 

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Later that day, he reported to the Oakland police he had been assaulted and made allegations of corruption against the Duongs. 

At the time, the FBI had already launched an investigation into a possible bribery scheme involving Juarez and the co-defendants, according to testimony last week from FBI Special Agent Katherine Barclay. She told the court that when the agency heard of Juarez’s allegations, they approached him for an interview. 

About a month later, in June 2024, Juarez sat down for his first interview with the FBI, she said. He has since pleaded guilty and become a cooperating witness in their case.

Prosecutors say his testimony will give the jury “an insider’s view” of the bribery scheme, connecting the dots between thousands of text messages, photos, videos, taped phone calls, Apple notes and other records they’ve admitted as evidence of the illegal dealings. 

But defense attorneys have suggested his story is pure fiction. 

Defense attorneys have repeatedly tried to discredit Juarez before jurors and are expected to continue to paint him as untruthful and vengeful — a moniker he gave himself in a recorded Evolutionary Homes board meeting with the Duongs in 2023.

“The evidence will show he was and is the consummate hustler,” Chan said during his opening statement. “Constantly with a new pitch and some reason he needs your money right now. He craved [only] one other thing just as much: political relevance and power in Oakland.”

Chan said every one of Juarez’s actions was in service to those “coveted goals.” 

“Only when he realized he was losing,” Chan said of Juarez’s eventual falling out with the Duongs, “that he manufactured his latest rebranding: to headline this trial as the prosecution’s star witness.” 

In pre-trial filings, defense attorneys have laid out what they say is a history of Juarez alleging misconduct by people who have made accusations or lodged lawsuits against him. 

Juarez, they said, is known to “counterattack” when deals appear to be falling through. He has “repeatedly falsely accused business partners of crimes and other wrongdoing in efforts to escape liability for his own actions — just as he has done here,” David Duong’s legal team wrote in an earlier court filing. 

In the spring of 2024, they suggested, Juarez had an ulterior motive. 

That year, Andy Duong told an inspector in the Alameda County District Attorney’s Office that he and his father had invested $800,000 in a business venture with Juarez and were victims of what Andy Duong said was a theft of their investment. 

Andy Duong alleged Juarez had promised to deliver 50 Evolutionary Homes container units, but had produced just two. 

In an audio recording of the confrontation between Juarez and the Duongs on May 3, 2024, the day of an alleged altercation, David Duong can be heard saying, “We want our $800,000 back.”

Juarez said he needs to get inside the office, and multiple voices respond, offering to bring his things out. 

The “business is gone,” David Duong can be heard saying.

Later that day, Juarez called 911 to report what he described as an alleged assault by 10 people, “organized by California Waste Solutions management.” He told the dispatcher the Duongs were involved in “racketeering and organized crime.” Attorneys for the company and the Duongs did respond to KQED’s request for comment on the allegations. 

According to Fine, that was the first time Juarez had talked to law enforcement about the family.

About a month later, he sat down with the FBI for an interview. Agents raided the defendants’ home and California Waste Solutions offices two weeks later. 

Prosecutors have said Juarez will be asked to describe his longstanding relationship with the Duongs and the details of how their alleged scheme with Thao and Jones came to be.

“He’ll talk about his history of doing dirty work for the Duong family,” Fine said during opening statements. 

Juarez laid out the alleged scheme in a detailed note on his iCloud account, which the FBI obtained before they ever spoke to him about the case. 

Prosecutors have said they’ll ask Juarez to talk about the evidence and what was said in meetings between the co-conspirators.

During previous witness testimony, defense attorneys have sought to highlight Juarez’s thwarted business ventures, including with his former romantic partner, Cecilia Mendez, who was convicted of grand theft and operating as a broker without a real estate license in 2019. That same year, Juarez surrendered his real estate license. 

Defense attorneys have also hinted at his tendency to drink heavily — and have a hot temper. 

“The Justice Department’s case is built around this person named Mario Juarez,” Thao’s defense attorney Jeffrey Tsai said during his opening statement. “He’s who the Justice Department simply calls a witness. But as the evidence will show in this trial, Juarez can be called many things, but a simple witness is not one of them.” 

KQED accountability reporter Alex Hall contributed to this report.