Mallard's owner arrested

San Joaquin County authorities arrested the owner of Mallard's restaurants in Modesto and Stockton and issued arrest warrants for his wife and two sons.

The county's district attorney's office issued a criminal complaint Friday against Richard Sang, his wife, Amber Lao, and Sang's two sons, Richie Sang and Brookes Sang.

The complaint alleges that the family, in 36 felony and misdemeanor counts, willfully withheld information with intent to evade taxes and also failed to collect, account for or pay taxes.

Six of those counts pertain to payroll taxes for employees at the Mallard's in Modesto, which closed Thursday. According to the complaint, the Sangs withheld information related to tax evasion and failed to pay payroll taxes all three years they owned the business, beginning in 2005.

The complaint also has two counts of failure to provide workers compensation insurance for Modesto Mallard's employees.

Most of the other counts involve suspected payroll tax evasion and missing workers compensation insurance at a Sang-owned Mallard's in Stockton that closed in October, and two restaurants the family owned in Palm Springs and Mission Viejo. There also are several white-collar crime enhancements.

Sudha Rajender, the San Joaquin County deputy district attorney who led the investigation into the Sangs, said Richard Sang, 62, was arrested Friday afternoon at his Stockton home.

As of Friday afternoon, Sang was being held in San Joaquin County Jail in French Camp in lieu of $1 million bail. Rajender said he did not believe Sang had an attorney.

In 1991, Sang pleaded guilty in federal court to fraud charges stemming from his management of restaurants in the Pacific Northwest and was sentenced to 46 months in federal prison. He and his family bought the Stockton and Modesto Mallard's Restaurants in 2005 from Modesto entrepreneur Dan Costa.

Rajender said law enforcement officials were looking for Lao, who is believed to be in Oregon, and Richard Sang's two sons, who might be in Southern California.

None of the family members could be reached for comment, and a Palm Desert attorney who represented one of the Sangs in a lawsuit did not return a call seeking comment.

Rajender said each felony count carries a potential three-year prison sentence upon conviction and fines of up to $20,000. A conviction on the misdemeanors could mean a one-year county jail sentence and fines of $10,000 or more.

A former Modesto Mallard's employee said Friday that he was happy to hear about the arrest warrants, but he was not optimistic about being paid what he was owed.

"I don't think I'll get my money back," said Jon Psarras of Modesto, a chef at Mallard's who had worked there for four months when it closed.

Psarras said he discovered Friday that the last paycheck he'd been issued Thursday can't be cashed, and that he and other employees weren't paid for work they did on the last day at all.

Other employees didn't receive tips that were paid through credit card payments during the past week, he said.

"It's just a bad situation," Psarras said. "I don't know that we'll get any money back anytime soon."

Mallard's former general manager, Stan Dimond, did not return a call for comment Friday.

The Gallo Center for the Arts will not be able to serve alcohol for a while because of the closure of Mallard's, which also served as the center's concessionaire.

The company, which had provided all the food and drinks at the center, also had the liquor license. While the downtown arts center has found others to temporarily serve food and drink, it can't get a liquor license immediately.

Dave Pier, executive director of the arts center, said it might take until the end of the year or longer to serve alcohol again.

Mallard's operated as a concessionaire in a lease arrangement. It paid the Gallo Center a portion of its revenues. Pier said the Gallo Center has lost no money because of Mallard's problems and that all the concessions workers were paid.

Pier said he hopes to hire another concessionaire as soon as possible.

"We've already had a number of inquiries from people who are interested in operating concessions here," Pier said.

Friday's arrest warrants come after Mallard's, which opened on 1700 McHenry Ave. in 1986, closed Thursday and put 51 employees out of work.

After investigators carried out a search warrant at the restaurant last week, the state Department of Industrial Relations fined the Sang family $100,000 for failure to provide workers compensation insurance.

The Sangs also are named in a $1.6 million lawsuit over defaulted loans, and owe Stanislaus County more than $10,000 in unpaid property taxes, according to the county assessor's office.

Bee staff reporter Lisa Millegan contributed to this report.

Bee staff writer Ben van der Meer can be reached at bvandermeer@modbee.com or 578-2331.

This story was originally published December 1, 2007 at 12:00 AM with the headline "Mallard's owner arrested."