Thai Worker Sweatshop Probe Grows : Labor: State subpoenas department store chain and targets another. Officials for both say they have found no record of dealings with garment firm.

Two major retailers were drawn into a widening web of turmoil Tuesday in connection with an El Monte sweatshop where authorities found more than 70 Thai immigrants toiling in alleged prison-like conditions.

State officials said they had subpoenaed Mervyn’s department store and were set to subpoena Montgomery Ward to determine whether the chains can be held liable for laborers’ back wages.

Meanwhile, the lack of early federal action against the sweatshop came under renewed scrutiny as federal authorities--some irate at what they consider back-stabbing by state officials--vociferously defended their actions in their first detailed comments on the affair.

A subpoena was served on Mervyn’s department stores Monday and another is scheduled to be served on Montgomery Ward later this week, said state labor Commissioner Victoria Bradshaw. The subpoenas, Bradshaw said, are to seek additional information because the firm’s addresses were discovered on shipping labels on boxes of garments found during last week’s raid spearheaded by the California Department of Industrial Relations.

A Mervyn’s spokeswoman said Tuesday that the firm’s officials, after checking company books, could find no record of having received clothing from the sweatshop, which authorities said did business as SK Fashions.

“At this point, we just don’t know if we’re involved at all,” Sandra Salyer said. “Hopefully we’re not involved because, judging by what I’ve read in the newspaper, it was a pretty frightening place.”

Montgomery Ward spokeswoman Sarina Butler said her firm has found no records of dealings with SK.

“It’s possible they would be a subcontractor for a company we do business with, but there’s no way to know that,” she said.

As additional information emerged Tuesday, finger-pointing increased while local and federal officials continued to explore why authorities waited three years to raid the El Monte site despite reports that near-slavery conditions existed at the gated apartment complex.

Among developments that came to light Tuesday:

* Federal immigration authorities acknowledged that they sought a search warrant for the El Monte compound in 1992, but the U.S. attorney’s office in Los Angeles declined to seek court permission to execute it. After that action, the U.S. Immigration and Naturalization Service closed its investigation. INS officials contend that they informed state labor officials by telephone in 1992 of their investigation’s results, although immigration authorities cannot find any written record of that assertion. State officials said they have found no referrals from the INS.

* In 1993, El Monte city building officials, acting on a neighbor’s tip that an illegal business was operating from a garage in the complex, launched an investigation that took them in and out of the complex at least three times. On the first two visits, they found the gate locked, but after they mailed a notice to the owner, they were let into the garage, officials said. That inspection was the first of at least three, but city officials said no egregious violations were turned up, and the owner was cited only for renting the property without the requisite license and for not having a necessary fire extinguisher.

* Late Tuesday, the El Monte City Council voted to write letters to U.S. Atty. Gen. Janet Reno and President Clinton to complain about the INS’ failure to inform the city about the sweat shop when it was discovered.

“There has to be a full-blown investigation into why the federal INS allowed this to go for three years,” said Councilman Ernest Gutierrez.

* El Monte police and sheriff’s detectives visited the property as recently as February, when they responded to a still-unsolved shooting death on the street outside. But investigators said they found no sign of a sweatshop.

* Sources in the Sheriff’s Department said the Asian organized crime unit has made about half a dozen raids on houses of prostitution in the past year in the San Gabriel Valley, all involving Thai women believed to have been brought to the United States by Thai or Sino-Thai crime gangs and forced to engage in prostitution to pay the cost of their passage. The pattern of exploitation closely resembles that in the El Monte garment case.

Based on a tip from a recent escapee, a multi-agency team of law enforcement agents raided the El Monte factory last Wednesday, finding undocumented Thai immigrants who allegedly had been held in virtual slavery for years.

In subsequent interviews, the workers said they were forced to toil from 7 a.m. to midnight for less than $2 an hour. Some said they had been in the guarded complex in a residential area on the 2000 block of Santa Anita Avenue for as long as seven years. They were barred from leaving even after repaying debts incurred in coming to the United States.

The next day, federal prosecutors charged six people in Federal District Court in Downtown Los Angeles with harboring illegal immigrants and two others with transporting them. The charges carry a maximum penalty of five years in prison and a $250,000 fine. Additional charges, possibly including peonage, extortion, kidnaping and selling into involuntary servitude, were also being considered against the eight defendants, who were ordered held without bail.

Bradshaw, whose office undertook the raid, said the subpoenas being issued to retail department stores this week are aimed at determining whether the firms have had direct links with the El Monte sweatshop.

“Two retail stores from initial evidence appear to have been dealing directly with the contractors,” Bradshaw said. “In one case [Mervyn’s] we’ve issued subpoenas to get additional information in order to make a decision whether to issue a notice of joint liability.”

Apparel firms that bought merchandise from the operation, an unregistered garment contractor, could be held legally liable for wage violations and would have to help cover the cost of more than $3.5 million in back pay due the workers, Bradshaw said.

Mervyn’s spokeswoman Salyer said buyers for the chain’s Southern California stores are now calling nearly 1,000 vendors to ask whether they may have subcontracted manufacturing jobs to the makeshift factory, which sprawled over what were six three-bedroom apartments.

“We’re cooperating fully” with state officials, she added.

Bradshaw said her office also is looking at contractors that may have served as middlemen between the factory and major retailers.

“We’ve heard from most retailers’ associations and most major retailers across the county,” she said, “and almost without exception, they are offering to do whatever research is necessary to see if any people were doing any business with them. If they find the garments, they want to pull them off the floors.”

Federal officials first learned about the factory on March 30, 1992, when a Thai-speaking Los Angeles police officer informed the INS of an anonymous tip he had received. The tipster told authorities that 45 people were “being detained, controlled and held against their will in a condition of involuntary servitude” at the two-story stucco apartment complex, according to a 1992 search warrant affidavit prepared by INS agent Richard Kee. The affidavit was made public Tuesday.

The agent spent at least 13 days between April and July, 1992, monitoring the complex on Santa Anita Avenue--and peeking in at Asian women toiling over industrial sewing machines, according to the affidavit.

Kee turned up no proof that the workers may have been detained in the gated complex against their wills.

But he meticulously noted details suggesting that the apartment complex had been illegally converted into a sewing business. Kee found empty thread spools and fragments of clothing patterns in the garbage, and he observed people entering and leaving the apartments toting bags of cloth and men’s slacks.

He also noted Asians unloading material from a white Isuzu truck with no license plates. Finally, Kee found that only one of the seven occupied apartments in the complex had telephone service.

However, no federal search warrant was executed largely because the U.S. attorney’s office determined that the information in the affidavit about involuntary servitude had come from the initial anonymous tipster, officials said.

A day before the multi-jurisdictional raid last week, the U.S. attorney’s office again refused to seek a search warrant. Michael Gennaco, assistant U.S. attorney in Los Angeles, said the evidence gathered in 1992, and again in 1995, did not contain sufficient proof of “probable cause” of criminal activity--the constitutional standard mandated by federal law.

The INS urged state authorities to delay executing the search warrants last week. But the state, which obtained a search warrant in Los Angeles Municipal Court, said it intended to proceed. The INS then pulled out of the operation, less than a day before the raid.

Federal authorities say guidelines and court decisions prevent them from acting on local search warrants. Bradshaw questioned the legitimacy of that concern, and in any case it was voiced too late.

“It was very frustrating because we’d worked for a long time to put this together as a joint operation,” Bradshaw said Tuesday. “We tried everything we could to keep them in the operation and they backed out 14 hours before we were scheduled to go in.

“Six people in the U.S. attorney’s office and the INS office asked us to postpone execution of the search warrants.”

Nonetheless, once state investigators confirmed the likely presence of undocumented workers, federal immigration officers were called to the scene, where they arrested scores of suspected illegal immigrants and the eight alleged factory supervisors.

“Obviously, it would be better for everyone had this operation been shut down three years ago,” INS spokeswoman Carole Florman said in Washington on Tuesday. “But there’s no doubt that the federal government has to live by the Constitution and the laws that govern this country. We cannot just barge into someone’s home.”

Meanwhile, El Monte city officials said Tuesday that building inspectors visited the apartment complex at least five times in 1993, following up on a neighbor’s complaint in mid-January.

On their first two inspections--for which no notice was given--they found themselves locked out, officials said. After the owner received a written notification of the alleged violation, however, the inspectors returned at least three more times; they found only that the registered property owner, Jose Reynoso of South El Monte, was renting the property without the requisite license and that the premises lacked a fire extinguisher.

Officials expressed horror that they could have been so thoroughly fooled by the alleged operators of the sweatshop.

“I can only surmise that somebody knew they were coming and cleaned it up,” Mayor Patricia A. Wallach said.

In a simultaneous raid on West 12th Place in Los Angeles, there was a major slip-up, one source said.

While there were arrests at the Downtown garment contracting shop, the person allegedly in charge of that sewing operation--Chavalet Manasurangkul--fled after telling agents he had to use a restroom, the source said.

The raid on the Downtown site was conducted by state authorities with some help from the Los Angeles Police Department.

In all, eight defendants now are being held without bail on federal charges: Sunee Manasulangkoon, Tavee Uvawas, Sunton Rawungchaisung, Rampa Suthaprasit, Seree Granjapiree, Hong Wangdee, Suporn Verayutnilai and Thanes Panthong.

In addition, the state was seeking liens against the assets of the defendants to keep them from moving money out of the country. And the state Division of Labor Standards Enforcement will seek $492,800 in penalties for labor code violations.

The 72 undocumented workers detained--67 women and five men--remained in INS custody Tuesday. All are potential witnesses in the case against the alleged operators of the sweatshop. All are likely to be expelled from the United States and returned to Thailand.

Elsewhere in the San Gabriel Valley, authorities said Tuesday that they had raided half a dozen brothels over the past year and rounded up Thai women who were being forced to pay off debts to smugglers in a pattern similar to the El Monte sweatshop case.

Investigators suspect that organized gangs are involved in the flesh trade, which they characterize as a thriving business in an area heavily populated by Asian immigrants.

“As soon as we shut down one house, another one pops up,” said Bob Franks, a detective in the Sheriff Department’s Asian organized crime unit.

Criminal prosecution, however, has been largely unsuccessful in this string of cases because of the difficulty in gaining cooperation from the women, many of whom appeared to have been held against their will, Franks said.

“The girls live in fear,” he said. “We think there’s an organized crime element, and they fear retaliation against themselves and their families back home if they cooperate.”

At least one of the prostitution raids occurred in El Monte, local police confirmed. Other raids took place in Monterey Park, San Gabriel, Rosemead and Temple City, Franks said. Details were not immediately available, but the cases all involved Thai women--and some Chinese nationals--who were working as prostitutes to pay off smugglers, he said.

Many of the women were promised legitimate jobs in the United States, brought over on fraudulent visas and then had their passports confiscated, Franks said. They were coerced into performing sex to pay off smuggling fees as high as $30,000, he said.

So far there have been no allegations of an Asian organized crime connection to the El Monte sweatshop case, but as one investigator said: “The pattern is the same. Instead of prostitution, we’re talking about sewing machines.”

Times staff writers Shawn Hubler, Karl Schoenberger, Stephanie Simon and correspondent Richard Winton contributed to this story.