By A.C. Thompson

BUZZ! I'M ringing the doorbell at 935 Folsom, a shabby two-story SoMa warehouse emblazoned with large red Chinese characters. I'd been told I could find Anna Wong, her husband, Jimmy Quan, and her sister Jenny Wong here at this hour.

No answer. –Two more buzzes. Still no answer.

Thinking they may be using another entrance, I decide to circle the property; some windows are propped open, but I discern few other signs of life. When I come back to the front door, it slams with a whoosh! and through a window I spy a figure scurrying into the bowels of the building. I pound the door hard with the flat of my hand and buzz, pound and buzz. No one responds.

The "nobody's home" bit doesn't particularly surprise me. In the past three years Quan and the Wong sisters have been hounded by creditors for more than half a million bucks, pummeled with six-figure tax liens, sued by the state, investigated by four different federal agencies, and most recently, indicted by the U.S. Department of Justice. After all that, I probably wouldn't answer the door either.

If state authorities are to be believed, not long ago the trio ran the largest sweatshop operation in San Francisco from this drab structure, generating millions of dollars in annual revenue while illegally paying a legion of workers sub-paltry wages – or none at all. The operation – which occupied three locations in San Francisco and went under the names Win Fashion, Wins of California, and Win Industries of America – churned out clothing for some of the biggest garment retailers in the country, as well as smaller, locally headquartered brands.

At this point, though, the three middle-aged entrepreneurs are embroiled in a landmark crackdown on sweatshops, facing a civil suit that could leave them on the hook for millions, and federal felony charges that may land them in the pen. The feds say Quan and the Wongs scammed the bankruptcy system to the tune of $6.7 million.

"It's one of the largest garment [sector] enforcement cases we've seen in the past 20 years," says David Balter, the staff attorney at the California Department of Industrial Relations who is spearheading the civil case. "This was a severe abuse of people."

"They're standing on their high horse saying, 'These are bad guys,' " retorts lawyer John Chu, who represented Anna Wong during the four-month civil trial. "Politically it sounds great. But that's simply not the case."

This multifront legal war is likely to grind on for years to come – a decision in the civil case isn't expected for at least a couple of months, while the criminal case is just in its infancy. Still, one intriguing wrinkle has already emerged: in the eyes of anti-sweatshop activists, some corporate characters close to the alleged rip-off have gotten off easy so far.

. . .

Anti-sweatshop crusaders were pumped when then-governor Gray Davis signed A.B. 633 into law in 1999. The groundbreaking legislation, coauthored by then-assemblymember Tom Hayden, was a response to the outsourcing wave washing over the garment industry, a way to confront big-name clothing companies that shave costs by contracting out their sewing to factories that would fit neatly into the plot of a Dickens novel.

A.B. 633, now a chunk of the state labor code, essentially says this: name-brand clothing companies are responsible for making sure the people who sew their garments are paid minimum wage – even if they work for an outside contractor.

Any person, the law states, "who contracts with another person for the performance of garment manufacturing operations shall guarantee payment of the applicable minimum wage and overtime compensation" to the workers sitting at the sewing machines.

And the law has some teeth: within 60 days of learning that workers are being exploited, the state can start pressing the name-brand companies for the money. Thanks to A.B. 633, says Nikki Bas, executive director of Oakland's Sweatshop Watch, "the government has been able to put millions of dollars back into the pockets of workers."

It's a legal tool that seems perfectly suited for San Francisco's biggest sweatshop case.

According to the civil suit filed against Quan and the Wongs, between March 2001 and August 2001 the trio failed to pay some 276 employees more than $1 million in wages and vacation pay. They allegedly kept this battalion of workers – nearly all of whom spoke only Cantonese, and many of whom purportedly made less than minimum wage – toiling with promises that the paychecks would arrive any day. The money never showed up.

Anti-sweatshop activists say workers in the factories crafted clothes for a wide array of major retailers – everyone from the boutique fashionistas at Bebe to Wal-Mart's low-budget Sam's Club division to department stores Sears and JCPenney. Smaller brands Cut Loose and Two Star Dog, both based in the Bay Area, also had garments made in the factories.

But so far, Balter and colleagues have only taken tentative steps toward hitting up those companies for the million bucks.

Balter says a bunch of factors played into that decision. For one thing, he says, Anna Wong and Quan – the key figures in the case – have significant assets to seize, including six valuable slabs of San Francisco real estate. (Anna Wong's lawyer says those properties, including several homes on Madrone Avenue in affluent West Portal, were legitimately transferred to other members of their extended family.)

Another issue, he says, is that Anna Wong and Quan put a layer of insulation between the factories and the name brands. Many of the big contracts were routed through Tomi Inc., a Utah-based company established by the couple. Due to a legal technicality, this corporate shell game makes it harder – maybe even impossible – to collect from the name brands. Because the money was funneled through Tomi, "some of the companies the [anti-sweatshop] advocates would like us to go after aren't eligible," he says flatly.

A third problem is hard proof. "At no time," Balter gripes, "have we ever had good information about the volume of goods" being made in the factories, or what the various companies paid for them.

"We think we have been aiming our sights in the right direction" he says, adding that given the legal and evidentiary obstacles, it made the most sense to "enforce the minimum wage law" – the claim at the heart of the still-pending civil suit.

. . .

Others, like Doris Ng, aren't so sure. An attorney at the Women's Employment Rights Clinic at Golden Gate University law school, Ng was one of several activist lawyers who helped Balter try the civil case.

Still, she disagrees with him on the use of A.B. 633. "We have been talking to [Balter and colleagues] about pursuing this aspect of the case for over a year," says Ng, a visiting professor. "Ideally, we should have been proceeding on all fronts. We should have been putting as many resources into this case as possible."

She views Tomi, the Utah intermediary, as a blatant bid to "shield" name brands from A.B. 633. "We would argue that it is an end run around A.B. 633," says Ng, who thinks the state should challenge such corporate fictions in court.

"We've found obstacles every step of the way in getting the law enforced," adds an obviously frustrated Marci Seville, a Golden Gate professor and director of the school's legal clinic.

Interestingly, Anna Wong's civil attorney, John Chu, is in agreement with Ng and Seville on this one point: he thinks the culpability should be spread around. "Why didn't they sue [the name brands]? Why were the other companies not brought into the action? I have no idea. They may have thought it was easier to go after Anna and Jimmy," he says.

Of course, Chu doesn't see eye to eye with the anti-sweatshop forces on much of anything else. To begin with, he insists the "sweatshop" label is totally bunk. "They had better working conditions than most of these places. [The factories] were clean, bright, well lit. There was free food," Chu maintains. "The employees were decently paid."

That is, until the businesses crumbled. What we're really looking at, Chu says, isn't a massive, well-crafted scheme to rip off grunt workers and screw creditors, but a routine bankruptcy, something that happens every day in an industry defined by Darwinian economics and slim profit margins.

That's a line federal prosecutors don't buy for a second. On Oct. 1, the U.S. Department of Justice dropped a 34-count indictment on Quan and the Wong sisters alleging they engaged in felony bankruptcy fraud and money laundering, in part by attempting to hide more than $4.7 million in payments from Cut Loose.

. . .

Buzz! I'm ringing the doorbell of a poured-concrete industrial hive in Bayview, just off Third Street. It's the home of Cut Loose. I'm greeted by a well-dressed Caucasian woman with brown hair, someone I've been told can answer my questions about the relationship between Cut Loose and the matrix of companies helmed by Quan and the Wongs. She looks constipated.

"We can't make any comment," she says.

"Can I get your name at least?"

"No."

And with that I'm shown the door.

Cut Loose's response is pretty typical; none of the brand-name companies that did business with these folks seems to want to talk about it, though a spokesperson for Sears did tell me the retail giant has a firm policy against dealing with sweatshops.

Obviously it's working.

E-mail A.C. Thompson at ac_thompson@sfbg.com.