SAN JOSE- California Alcoholic Beverage Control Agents (ABC) recently arrested three employees at a San Jose bar following a three-month undercover investigation into suspected drug crimes.  During the operation at the Neel Lounge, an undercover ABC agent bought cocaine from a waiter and a dancer on four different dates.  Each of the drug transactions took place inside the lounge.  ABC agents then obtained two arrest warrants and two search warrants, one served at the bar, the other served at the waiter's home.

In addition to the arrests of the waiter and dancer, ABC agents arrested the manager of the restaurant who was found to be in possession of ecstasy pills.

Further investigation revealed the business was not reporting its true number of employees to state employment and tax agencies.  Investigators from the Employment Development Department  (EDD) and Division of Labor Standards Enforcement (DSLE) conducted their own investigation and as a result, DLSE issued a stop order and the business is closed pending further action.

"It is always a dangerous situation when undercover agents are involved in the purchase of illegal drugs," said Alan Barcelona, president of the California Statewide Law Enforcement Association (CSLEA).  "ABC agents routinely conduct these types of investigations to address criminal activity in licensed establishments.  That criminal activity often spills out into the surrounding neighborhood and community.  Their investigations are a vital component to keeping us safe."