By Robert J. Hansen | OBSERVER Staff Writer
Sacramento City Councilmember Sean Loloee was arraigned in federal court Friday, charged with multiple counts of holding false immigration documents, using false immigration papers, falsifying records, wire fraud and conspiracy to defraud the U.S. Dept. of Labor.
Karla Montoya, 42, general manager of Viva Supermarket, also was arraigned for similar crimes in the indictment filed in the United States District Court for the Eastern District of California.
Both plead not guilty.
U.S. Attorney Phil Talbert’s office said Loloee, 53, of Granite Bay and Montoya of Sacramento were charged with conspiracy, obstruction of agency proceedings, and possession and use of false immigration documents. Loloee also is charged with falsification of records and engaging in a pandemic relief fraud scheme.
According to Talbert’s office, Loloee and Montoya beginning in 2008 engaged in a conspiracy to largely employ workers who lacked authorization to work in the United States. The indictment alleges Loloee and Montoya did so to illegally reduce labor costs, including failing to pay required overtime wages.
In 2020, Loloee and Montoya obstructed two Department of Labor investigations of Viva Supermarket by making false statements to investigators, listening in on an investigator-employee interview to coerce the employee into making false statements, instructing an employee to lie to an investigator and directing certain workers to hide to avoid being questioned.
The indictment also alleges Loloee committed wire fraud when he applied to receive COVID-19 relief. In May 2021, Loloee substantially underreported each of his store’s 2020 gross receipts to make them appear entitled to an award of roughly $1.2 million.
In a statement, Talbert said Loloee and Montoya face a maximum statutory penalty of five years in prison and a $250,000 fine for each count of conspiracy to defraud the Department of Labor, to commit immigration document fraud, and to obstruct justice; up to 10 years in prison and a $250,000 fine for each count of possession of false immigration documents or use of a false immigration document; and up to five years in prison and a $250,000 fine for each count of obstruction of agency proceedings.
Talbert said if Loloee is convicted of the counts of falsification of records or wire fraud, he faces a maximum statutory penalty of up to 20 years in prison and a $250,000 fine for each count.
Loloee and Montoya face a total of 25 federal charges.
The duo allegedly discouraged Viva Supermarket employees from complying with the Department of Labor investigation by threatening “immigration consequences” if they cooperated and directing employees to lie about aspects of their employment.
“The charges are very troubling,” Sacramento Mayor Darrell Steinberg said. “I am talking regularly with Councilmember Loloee. I remain confident he will do the right thing for himself, his district and the city. I will have no further comment for the next several days.”
Councilmember Mai Vang said Loloee’s purported actions go against the ethical standards expected of public officials.
“These disappointing allegations compromise his ability to effectively represent our city,” Vang said on X, formerly Twitter.
Loloee’s attorney didn’t immediately respond to a request for comment.
The next court date is Feb. 12, according to Talbert’s office.
Calls for Loloee’s resignation have been coming from the community after his stores were raided by federal agents in October.
Community activist Maria Grijalva spoke at a City Council meeting last month calling for Loloee’s resignation and translated for a man who only spoke Spanish and was also calling for Loloee’s resignation.
“These are the results of labor exploitation and we demand an immediate resignation,” Grijalva said in November.
Grijalva helped Viva Supermarket employees who filed the complaint against Loloee and his business practices in 2020.
Fabrizio Sasso, executive director of the Sacramento Central Labor Council, also demanded Loloee’s resignation, citing Viva Supermarket employees’ reports of wage theft, forced labor, human trafficking and other labor abuses.
“In addition to the numerous reported labor violations, Mr. Loloee continues to be shrouded in controversy and scandal,” Sasso said at a City Council meeting in November.
Sasso said questions surrounding Loloee’s residency remain because the city’s investigation last year was incomplete and failed to probe clear areas of concern.
Attorney Melinda Guzman began the investigation last year after Steinberg and District 2 residents called for an investigation into Loloee’s residency. The independent investigation determined Loloee lives in the district he represents and meets legal residency requirements, the city announced.
However, as a condition of his release, a federal judge ordered Loloee to reside at his Granite Bay home. He is not under house arrest.
Ramona Landeros, founder of the Benito Juarez Association, has assisted employees of Viva Supermarket for years. She said it was unfortunate to hear about Loloee’s abusive behavior and that it was equally unfortunate the City Council refused to remove him when he was charged with failing to provide his workers with breaks and lunch.
“His treatment of his employees should have been enough to find him unfit to serve as a public official,” Landeros said.
Landeros added that Loloee’s indictment was one step toward justice for workers, but that a single indictment does not fully address the systemic issues faced by these vulnerable groups.
“We want to send a clear message to other unscrupulous employers that ‘Si Se Puede!,’” Landeros said.
Assistant City Clerk Wendy Klock-Johnson said a vacancy on the City Council, other than the mayor, would be filled by special election unless such vacancy occurs within one year of the next general election, in which case the vacancy would be filled by appointment by a majority of the remaining members of the council.
A person elected or appointed to fill a vacancy shall hold office for the remainder of the unexpired term of the former incumbent. The last councilmember to resign was Bonnie Pannell in 2014. She was replaced by special election.
There is no mechanism for the City Council to remove someone from office, Klock-Johnson said.