News : Duong gets 78 months; Long, 30; feds plan Peony forfeiture; business closed

A hand-written sign on the Peony Family restaurant in downtown Vinton says "Closed."

Up until the first week in May, the case involving Chan Duong and his wife, Phung Ca "Polly" Long, was progressing in a way that seemed destined to allow the couple to keep operating the restaurant.

But after a federal search warrant executed May 3 revealed evidence that the couple had continued to defraud federal and state governments by underreporting restaurant sales and employee wages, the penalties for their misconduct --both in terms of the length of their prison sentences and the financial impact of their crimes on the defendants -- increased significantly.

Duong and Long began serving their federal prison sentences today. The couple have been in custody since the first week in May, when they were jailed for violating the terms of their pre-sentencing release.

In November, Duong pleaded guilty two to charges, harboring more than six illegal immigrants and filing false tax returns. Long pleaded guilty to harboring illegal immigrants and giving false information to the Iowa Medicaid program, resulting in receiving more than $22,000 in benefits to which she had not been entitled.

During the May search warrant executed at both the restaurant and the couple's home, Immigrations and Customs Enforcement (ICE) agents found large amounts of cash, gold bars and records indicating that the sales and wage amounts reported to state and federal government agencies since November were false.

Calling the actions of the defendants "very gutsy," Chief Judge Linda Reade on Monday sentenced Duong to 78 months in prison and Long to 30 months, the maximum sentences under federal guidelines.

While Long tearfully told the court she was "very very deeply sorry" and would not violate the law if she were to be given a second chance, Judge Reade disagreed.

"Your conduct speaks volumes," said the judge, who also said she understood that Long has two minor children and another heading to college at the University of Iowa this fall. "It kind of takes my breath away that you could be in that much trouble and continue this criminal conduct."

In the original plea agreement which federal prosecutors and defense attorneys were just about finished negotiating before the May search warrant, the couple would have been allowed to keep their restaurant and their Vinton house.

But now, said Attorney J. Keith Riggs during the hearing, the couple has also agreed to the forfeiture of the restaurant and their home. The restaurant remained open Monday; employees said they do not know when federal officials will begin the forfeiture proceeding that will most almost certainly result in the closing of the Peony Family Restaurant.

Although the couple appeared in court together, Judge Reade conducted separate hearings for Duong and Long. Duong's sentencing took place first.

When asked if he had anything to say to the court, Duong replied, "I'm sorry." Both Duong and Long used the services of an interpreter to help them understand the proceedings.

Reade said she was "disturbed" by the evidence that Duong continued to violate the law. the evidence in his case indicated that if he were to be released, he would continue to break the law.

"I do not have confidence he would not pick up where he left off," she said.

There are no federal prisons in Iowa; Judge Reade said that she would recommend that the defendants be placed in a facility that is as close to their family as possible, hopefully in one of the states bordering Iowa. Also, Judge Reade said she would recommend that Duong be enrolled in a prison vocational program in the area of baking or culinary science.

Duong was also ordered to pay restitution of $119,514 in unpaid taxes to the IRS; Long must repay $22,696 to the State of Iowa's Medicaid fund. Each must also pay a $200 special assessment; Judge Reade told both that there are many benefits to paying that special assessment before beginning to serve their sentence. She suggested they have a family member pay it at the federal Clerk of Court office, which is in the same temporary building on C Avenue north of Highway 30 (the new federal courthouse in downtown Cedar Rapids is scheduled to be finished next year).

Official News Release From U.S. Attorney's Office