Peony restaurant owners face new allegations

Posted: Friday, May 6, 2011 12:00 pm

VINTON --- Gold bricks, bundles of cash and tax-free restaurant checks show a Vinton couple accused of harboring illegal aliens is still engaged in criminal activity, federal authorities said Thursday.

Chan Gia Duong and his wife, Phung "Polly" Long, have been awaiting sentencing on harboring charges in 2008 in connection with their Peony restaurants in Vinton and Toledo.

The two had forfeited hundreds of thousands of dollars and jewelry seized during raids in 2008, and they were scheduled to go to court for sentencing next week.

But the sentencing was put on hold following fresh searches at their home and establishments by immigration agents on Tuesday.

The new investigation, which included covert restaurant visits for egg rolls, alleges the two continued to hide profits from the government and under-report wages, according to court records.

Duong and Long, who had been free while awaiting the outcome of the harboring case, were arrested Wednesday on a violation notice.

Immigration agents said in court records they found seven gold bars --- five at the Vinton restaurant and two at the house --- and $87,000 in cash during the Tuesday searches. They also seized handwritten ledgers allegedly at odds with the businesses' bank deposits.

"There is a significant disconnect between the actual sale figures and the figures reported to the Iowa Department of Revenue," Assistant U.S. Attorney Patrick Reinert wrote in court records.

He said the couple's records show $107,000 in sales for the first quarter of 2010, but they reported only $90,000 to the Iowa Department of Revenue.

"The pattern of a lack of significant cash deposits through April 2011, and the significant difference in sales figures demonstrates (their) continued involvement in misconduct," Reinert wrote.

Undercover officers ate at the Vinton restaurant on March 17 and noticed that the cash registers appeared to be turned off and not recording sales, court documents state. They ordered the Hunan beef, garlic chicken and egg rolls, and when they paid, they noticed no entry under "sales tax" on the guest check.

A subsequent clandestine visit for General Tso's chicken, Mongolian beef and diet Coke resulted in bills that appeared to charge less than the 7 percent sales tax, records state. Those who paid in cash didn't get receipts.

Authorities also allege there is evidence the couple under-reported employee wages to the state. Agents found a bank bag containing paychecks in the Vinton restaurant. Some employees had only a paycheck and others had a check bundled with cash, records state.

During the search, Long allegedly attempted to hide cash in the restroom of the Vinton restaurant, court records state, and officers found she was carrying $7,500 in cash when they booked her at the Linn County Jail.

Duong's wallet had cashiers checks totaling $63,000 and a $90,000 check made out to the Peony restaurant, records state. ... 7aae1.html