Four members of the Sang family pleaded not guilty Monday in Stockton to charges that they failed to pay payroll taxes at Mallard's Restaurants they own in Modesto and Stockton, according to published reports.
Both restaurants are closed now.
Family patriarch Richard Sang was denied bail and will remain in San Joaquin County Jail. His two sons, Richie and Brookes Sang, and his wife, Amber Lao, were released on their own recognizance after they turned themselves in before the arraignment hearing.
The judge cited Richard Sang's 1991 conviction for fraud related to restaurant operations in the Pacific Northwest as a reason to keep him in jail, according to media reports.
Attorneys in the case could not comment Tuesday, citing a gag order issued by the judge. The Sangs face 36 criminal counts of fraud and tax evasion.
Former employees at both restaurants say they weren't able to collect such benefits as workers compensation and unemployment, though deductions were taken from their paychecks. At least one former employee at the Modesto Mallard's said he also had difficulty cashing his paychecks.
In a court filing before Monday's hearing, investigators for the San Joaquin County district attorney's office listed property of the Sangs that was discovered during searches last month.
The search warrant included several state agencies and was carried out at both Mallard's locations, two other Sang family-owned restaurants in Southern California, and Richard Sang's home in Stockton.
The evidence includes $10,000 in cash stored in the pocket of a trench coat at Sang's house, a Rolex watch and three vehicles, all from 2006 or 2007.
An additional $300 was discovered in a blue blazer at Sang's house.
State officials fined the Sangs $100,000 in connection with the search warrant after determining that the restaurant owners weren't carrying workers compensation insurance.
Court filings also made reference to a civil lawsuit against the Sangs in Washington. Mission Capital Works, based in Seattle, contends in the lawsuit that the Sangs owe the company $1.3 million in defaulted loans.
As well, Bank of America has filed a civil lawsuit in Riverside County, saying Brookes Sang-owned SC Restaurants owes about $715,000 in unpaid overdraft charges and legal fees.
The Modesto Mallard's, a McHenry Avenue fixture for more than 20 years, closed on Nov. 29. The Stockton Mallard's closed a month earlier.
A pretrial hearing for the defendants is scheduled Dec. 20 in San Joaquin County Superior Court.
Bee staff writer Inga Miller contributed to this report. Bee staff writer Ben van der Meer can be reached firstname.lastname@example.org or 578-2331.