Updated 4:11 p.m.
Sacramento City Council member Sean Loloee pleaded not guilty on Friday after being indicted on federal charges of falsifying immigration documents, fraudulently obtaining COVID-19 relief funds and withholding overtime wages.
The 25-count indictment was handed down by a federal grand jury on Thursday night. It named Karla Montoya, the general manager of Loloee’s Viva Supermarket businesses, who also pleaded not guilty on Friday.
Loloee was allowed to leave the court Friday on his own recognizance. Montoya was released on a $25,000 bond.
“Since 2008, Loloee and Montoya engaged in a conspiracy to employ a labor force at the stores that consisted of a significant number of workers who lacked employment authorization in the United States,” a statement from the U.S. Department of Justice reads. “Loloee and Montoya did so for the purpose of reducing Loloee’s labor force costs through unlawful means, including by failing to pay required overtime wages.”
CapRadio called and texted Loloee at a phone number this organization has previously reached him at, but he did not immediately respond. Loloee’s attorney Cassandra Ferrannini did not immediately respond to an email or return a voicemail message on Friday morning. But Ferrannini’s office provided a written statement from Loloee.
“Today’s news comes as a shock, particularly since I came to this country as a teenager in 1989 with absolutely nothing and have worked tirelessly to meet the needs of the underserved in both my grocery stores and as a member of the city council; both of which I will continue to do as I fight these allegations,” the statement said.
Mayor Darrell Steinberg called the charges troubling in an emailed statement to CapRadio.
"I talked to the Councilmember this morning and will be speaking with him throughout the day,” Steinberg said in the statement. “He has the right to due process, and he also has an obligation to do the right thing by District 2 and by the city. I expect the situation to be resolved within the next 24 hours."
The Department of Labor 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.
- Nov. 22, 2023: Loloee’s attorney requests a court temporarily stop proceedings for the Department of Labor lawsuit he is facing because of Fifth Amendment concerns, including the right against self-incrimination.
Loloee has also been the subject of other investigations, namely over his residency in relation to his seat on Sacramento’s City Council.
In June 2022, a report from The Sacramento Bee found Loloee lived in a million-dollar home in Granite Bay since he was sworn into office, instead of in District 2, a largely low-income he was elected to represent in 2020.
Following the report, Sacramento Mayor Darrell Steinberg and a group of north Sacramento community, business and neighborhood association leaders called for an independent investigation into where he actually lived. An October 2022 city investigation found that he did, indeed, live in District 2.
But the Department of Justice listed Loloee’s residency as Granite Bay on their Monday statement announcing the indictment. And during the arraignment hearing Friday, the judge ordered Loloee to live at the Granite Bay home, since Montoya, his co-defendant, is currently living at his North Sacramento home.
Loloee is not running for reelection. His term is set to end in December 2024.
The primary election for his seat is scheduled for March 5. Nine people have filed paperwork to run for the office representing District 2, which includes Old North Sacramento, Hagginwood, Woodlake and Del Paso Heights.
If Loloee and Montoya are found guilty, the duo could be charged a $250,000 fine for each count and be subject to time in prison.
Loloee’s next hearing is set for Feb. 12, 2024.
Follow us for more stories like this
CapRadio provides a trusted source of news because of you. As a nonprofit organization, donations from people like you sustain the journalism that allows us to discover stories that are important to our audience. If you believe in what we do and support our mission, please donate today.
Donate Today
