SACRAMENTO, Calif. — Sacramento City Councilmember Sean Loloee was federally indicted Thursday by a federal grand jury for conspiracy, obstruction and falsifying records among other charges connected to his Viva Supermarkets business.
A federal grand jury returned a 25-count indictment against Loloee along with Viva Supermarkets General Manager Karla Montoya. They are both being charged with conspiracy, obstruction of agency proceedings and possession and use of false immigration documents.
According to the U.S. Attorney's Office, Loloee also faces charges for allegedly falsifying records to receive more than $1 million in COVID-19 relief funds.
Loloee denies the allegations and says he will continue to fight them going forward.
"Today's news stories come as a shock, particularly since I came to this country as a teenager in 1989 with absolutely nothing and have worked tirelessly to meet this needs of the underserved and 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," said Loloee in a statement.
Loloee and Montoya pleaded not guilty during their court appearance Friday. The state did not request either be detained. Loloee's attorney objected to his primary address being listed in Granite Bay opposed to Sacramento, but the judge granted bail and released him to his Granite Bay home.
The judge says Loloee and Montoya are only allowed to communicate if legal council is present or if their conversation is preapproved by the court.
"I don't think he's looking at quitting anything, I think there's a big fight coming," said attorney William J. Portanova, who is representing Montoya.
"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," according to a statement from the U.S. Attorney's Office.
Sacramento Mayor Darrell Steinberg released a statement saying, "The charges are very troubling. I talked to the councilmember this morning and will be speaking with him throughout the day. 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 indictment comes after a chain of grocery stores owned by him were raided in October by federal authorities. The IRS, Homeland Security and the Department of Treasury raided four Viva supermarkets across Sacramento County.
In October, the IRS told ABC10 it was part of an “authorized criminal enforcement” investigation and couldn’t say if any arrests were made. At that time neither Loloee nor Viva Supermarkets provided comment to ABC10.
The investigation follows an April 2022 lawsuit filed by the Labor Department against Loloee alleging the councilman underpaid employees, interfered with federal investigations and violated child labor laws.
Loloee and Montoya will appear back in court Feb. 12, 2024.
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