State Investigating Alleged Extortion by Laotian Agency : Refugees: Family Community Inc. of Garden Grove demanded money for revolutionary group in Laos, new arrivals complain.

The state attorney general’s office confirmed Thursday it is investigating allegations that Laotian refugees in Southern California were shaken down for contributions to a Laos liberation group as a condition for receiving social services.

After investigating extortion complaints from about 18 Hmong refugees in Riverside, San Bernardino and Orange Counties, the state Department of Social Services has also recommended terminating all state and county contracts with the social service agency, Lao Family Community Inc., said department spokeswoman Kathleen Norris.

“The evidence is there to support these allegations, and we are acting accordingly,” Norris said Thursday. She said the department had been criticized for ignoring such allegations from refugees in the past and was now conducting a statewide probe.

Deputy Atty. Gen. James D. Dutton said prosecutors are also conducting a separate criminal investigation into alleged embezzlement, extortion and other crimes by individuals who “may be connected or associated” with the political group, United Lao National Liberation Front, or with Lao Family Community. Both organizations have headquarters in Garden Grove.

The Liberation Front, also called Neo Hom, advocates the overthrow of the Communist government of Laos. It is headed by former Laotian Gen. Vang Pao, who once led a Hmong army in a Central Intelligence Agency-backed drive against the Pathet Lao.

The Neo Hom had been all but forgotten until December, when it reportedly declared a “provisional revolutionary government” from the jungles of Laos and began waging insurgent attacks against the government. Pao, who lives in Garden Grove but travels extensively, is reported to be the military head of Neo Hom.

Pao’s son-in-law, Kao Thao, was formerly the director of Lao Family Community, a nonprofit agency with 10 branch offices in California and other states.

Thao, 30, was fired from Lao Family in July for misappropriating funds. Last month he pleaded guilty to embezzling more than $70,000 from the agency and promised to repay the money. He is scheduled to be sentenced in November.

Dutton said the embezzlement case is unrelated to the extortion probe. Thao’s attorney, Bruce Bridgman, said he had no knowledge of any extortion probe.

Lao Family acting director Gayle Morrison on Thursday denied that the social service agency and the Liberation Front are secretly linked. Morrison called the ongoing multiple investigations “a witch hunt.”

Morrison also said the evidence did not justify the recommendation by the DSS’ Civil Rights Bureau that all state contracts with Lao Family be terminated.

“We’re bending over backwards to help them (investigate), and we will do anything to do so,” Morrison said.

In Orange County, Lao Family has a $356,000 state contract to run a refugee child development program in Huntington Beach. It has lost contracts for job training and other services, however, and has been cited by the Internal Revenue Service for nonpayment of payroll taxes.

Alicia Martinez, who conducted the investigation for the Civil Rights Bureau, said about 18 refugees in Orange, Riverside and San Bernardino counties have alleged they were asked for contributions to the Liberation Front after they were referred to Lao Family Community for welfare screening or job training.

Fearful that they would not receive help otherwise, some refugees contributed from $60 to $100 a month from their welfare checks to the cause, Martinez said.

In addition, Martinez said, refugees were sold certificates that would guarantee them jobs as government officials in a newly liberated Laos, paying between $1,000 and $5,000 for the documents.

“They were being told that if they wanted to get into Laos when Vang Pao took over again, that they would have to have these certificates if they wanted to be a policeman or a judge or some official,” Martinez said.

Sources in Orange County said the sale of such certificates has been common knowledge in the Laotian refugee community for years. Many people supported the cause and donated freely, but others were pressured, the source said.

“It’s a very sad case,” the source said. “They have been telling people that if you don’t belong to the organization, you can’t go back when they liberate the country.”

According to Martinez, some refugees in San Bernardino said they were afraid to go to Lao Family for welfare screening because they had been forced to contribute to the Liberation Front while in Thai refugee camps, or had been approached by the group in this country.

Martinez said Thao had shared an office with Liberation Front officials a few doors down from the Lao Family headquarters in Garden Grove. During a search of the office by the attorney general’s investigators, she said, one of Thao’s filing cabinets was found to contain Lao Family case files and budgets in the same drawer as files marked with the Neo Hom logo.

Though some of the material was in Hmong, Martinez said, “there were lists of names of people who were contributing to Neo Hom.” She would not comment on whether the donors’ names matched those on the case files.

However, Morrison said, the filing cabinet belonged to the Neo Hom officials who shared the office, and not to Thao. She said the state report was inaccurate and misleading, and an internal probe has turned up no corroborating evidence.