SACRAMENTO, Calif. (CN) — Calling out Sacramento Mayor Darrell Steinberg in what he termed a “politically motivated circus,” City Councilmember Sean Loloee resigned abruptly on Thursday.
The move came a week after Loloee — under federal indictment on charges including conspiracy, obstruction and pandemic relief fraud related to his supermarket business — said he’d complete his term.
Loloee issued a video message Thursday afternoon announcing his resignation.
“I'm stepping down because of the recent politically motivated circus that Mayor Steinberg has created in an attempt to cover up his many shortcomings as a mayor of Sacramento,” Loloee said. “I love this city and my district too much to let the mayor use my situation as a distraction.”
Steinberg, who last week publicly called for Loloee to resign, said he didn’t prejudge Loloee’s guilt or innocence. Instead, he called for his resignation because the criminal accusations are incompatible with holding public office.
Steinberg also last week said Loloee couldn’t serve as a council member because a court order required him to live at his Granite Bay home. A Sacramento council member must live in Sacramento.
“Obviously, Councilmember Loloee is under a lot of pressure,” Steinberg told the media in response to Loloee’s Thursday comments. “I just wish him the best. He did the right thing and I wish him the best.”
Pivoting to the future of the District 2 council seat, Steinberg suggested that if a candidate secures a majority in the March 5 primary, the council should appoint that person. They would then start their full term in December.
If no one candidate gets enough votes, the council should appoint a caretaker to the seat, Steinberg said. A runoff for the full term would occur in November.
The political career of the 53-year-old Loloee was upended when on Dec. 15 an indictment was unsealed against him and Karla Montoya, 42. Grand jurors in the indictment stated that both employed a “significant number” of people at Loloee's supermarket chain, Viva Supermarkets, over the past 15 years who weren’t authorized to work in the country. That led to lowered labor costs and no overtime pay.
The U.S. Department of Labor’s investigation into Loloee’s supermarkets began in 2020. Officials said Loloee and Montoya, his general manager, lied to investigators. They also listened to an interview with an employee, trying to have that person lie. Other employees were told to hide from investigators and avoid interviews.
A wire fraud accusation against Loloee stems from the Covid-19 Restaurant Revitalization Fund program. Loloee’s applications under-reported gross receipts, which made them appear eligible for funding. He received about $1.2 million.
Both Loloee and Montoya have pleaded not guilty.
Loloee in his video statement denied wrongdoing, saying people lose their vote when a petty grievance changes into “false allegations and court cases.”
“The recent challenges that have played out in the media are misrepresenting who I am and how I run my business,” Loloee said. “I look forward to my day in court where the truth can be heard. The very essence of our democracy lies in the principle of due process and the presumption of innocence until proven guilty.”
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.
