Sacramento Council member Sean Loloee makes first public appearance since raids; labor department says it wasn’t involved

Sacramento City Council member Sean Loloee on Tuesday sat at the dais for the first time since federal and state agents raided grocery stores he owns last week. 

Neither Loloee or other council members commented on the raids during the meeting, and why agents temporarily closed the businesses remains unclear.

Loloee told CBS13 on Friday that the raids on his Viva Supermarket stores were likely linked to an ongoing U.S. Department of Labor lawsuit. But in a statement emailed Tuesday, labor department spokesperson Michael Petersen said the DOL wasn’t involved with the raids.

Uncertainty surrounds Sacramento City Council member Sean Loloee after federal agents raid stores

The criminal law enforcement activity at the stores on Thursday was separate from an ongoing civil lawsuit the labor department filed against Loloee, Petersen said. Homeland Security Investigations, IRS Criminal Investigations and the California Department of Justice participated in the raid, CapRadio previously reported.

“The DOL is gathering documents and information to prepare for trial (scheduled to begin in November 2024) through the civil discovery process, not through search warrants like those executed by other federal law enforcement agencies last week,” Petersen said in an emailed statement Tuesday. 

The department sued Loloee, his Viva Supermarket businesses and general manager Karla Montoya in April 2022, alleging they failed to pay employees minimum wage, overtime rates and COVID-19 sick leave, in addition to violating child labor laws. It further accused Loloee of interfering with the department’s investigation into the business and retaliating against employees who cooperated with the investigators. The department also alleged the businesses coerced employees to return back wages they received from a settlement.

The department last submitted a court filing for the case on Thursday, when it claimed Loloee and his businesses continue to violate the Fair Labor Standards Act and obstruct the department’s access to information. Loloee allegedly missed an Oct. 21 deadline to give the department additional documents, according to the filing. 

Five days after the deadline, federal and state agents temporarily closed Viva Supermarket locations. Petersen said the Department of Labor lawsuit is separate from any criminal investigation. 

Loloee’s attorney Cassandra Ferrannini didn’t immediately respond to emailed questions. In an Oct. 16 court filing, Ferrannini argued Viva Supermarket already gave the department 74,000 pages of documents earlier this year. 

Loloee’s legal team has also argued the lawsuit is part of a politically-motivated campaign against him, his grocery stores and Montoya. Ferrannini asked the court to dismiss the complaint in June 2022, calling it overreaching. 

The department has investigated Viva Supermarket several times in the past 14 years. Here’s a timeline based on court documents: 

• 2009: The department investigates the Viva Supermarket in Glenwood Meadows on Norwood Avenue. Investigators examine practices from November 2008 and May 2009. The business and Loloee eventually sign a settlement with the department, agreeing to pay about $3,500 in back wages and $1,100 in penalties for child labor. 
• February 2020: The department begins a second investigation into the Norwood Avenue store to see whether it complies with the Fair Labor Standards Act. 
• March 2020: In the primary election for the Sacramento City Council District 2 seat, Loloee wins enough votes to advance to the general runoff election. 
• May 2020: Loloee signs a second settlement agreement with the department following the investigation covering February 2018 to February 2020. The Norwood Avenue business owed about $35,000 in back wages to current and former employees. 
• November 2020: The department notifies Loloee it is opening a third investigation into the Norwood Avenue store. An investigator says he will look into whether the business is complying with the Families First Coronavirus Response Act, which required certain employers to provide paid sick leave for reasons related to COVID-19. 
• December 2020: Loloee takes the oath of office and begins his term as a City Council member after winning the general runoff election in November. 
• February 2021: The department sends another letter to Loloee, saying it will investigate all four of Loloee’s Viva Supermarket businesses — the Norwood Avenue store, the Marysville Boulevard store in Del Paso Heights, the Folsom Boulevard store in Rancho Cordova and the North Adams Street store in Dixon. 
• April 2022: The department files a lawsuit against Loloee, his four Viva Supermarket businesses and Karla Montoya, the general manager of the businesses. The department alleges they interfered with the investigation and failed to maintain records of hours worked and wages paid, among other issues. 
• June 2022: Attorneys for Loloee, his businesses and Montoya file a motion to dismiss the lawsuit. In a court document, attorneys argue the complaint is overreaching and part of a politically-motivated campaign against the defendants. 
• Oct. 21, 2023: Loloee misses a deadline to give the labor department additional documents, according to a court filing. 
• Oct. 26, 2023: Agents with Homeland Security Investigations, IRS Criminal Investigations and the California Department of Justice raid Viva Supermarket locations in the Sacramento area.

Loloee faced a separate investigation into his residency after a June 2022 Sacramento Bee report in which North Sacramento neighbors accused him of living in Granite Bay instead of in the district he represents. An independent investigation found he meets legal residency requirements to hold office. 

Loloee’s chief of staff Veronica Smith didn’t immediately respond to requests for comment. His term on the council is set to end in December 2024. Loloee told CBS13 on Friday that he is not running for reelection and he made the decision months before the raid. 

Candidates who have announced campaigns for the District 2 council seat include Del Paso Heights resident Alicia Bledsoe, former Grant Union High School vice principal Kim Davie, former state Assemblymember and former Sacramento County Supervisor Roger Dickinson and former Twin Rivers Unified School Board Member Ramona Landeros. 

The primary election is scheduled for March 5. If no candidate wins more than 50% of the vote, the top two will move on to the general election in November 2024.