SACRAMENTO, Calif. (CN) — A federal grand jury has indicted a Sacramento city councilmember and the general manager of his chain of supermarkets on accusations he employed people who couldn’t legally work in the country and lied about it.
Additionally, Shahrir “Sean” Loloee, 53, of Granite Bay, is accused of misrepresenting the revenue of Viva Supermarkets when applying for Covid-19 relief funds, receiving some $1.2 million from the federal Small Business Administration.
Loloee and Karla Montoya, 42, of Sacramento, face charges of conspiracy, obstruction of agency proceedings and possession and use of false immigration documents. Loloee faces additional charges of falsification of records and a pandemic relief fraud scheme.
The 25-count indictment, handed up Thursday, was unsealed Friday.
A person in Loloee’s council office said the indictment had nothing to do with his elected position.
"The charges are very troubling,” Mayor Darrell Steinberg said in a statement. “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."
Loloee owns Viva Supermarkets. Montoya — who the indictment states has no employment eligibility in the country — serves as his general manager. Both are accused of employing a “significant number” of people since 2008 who weren’t authorized to work in the United States. That allowed them to reduce labor costs and not pay overtime.
Loloee hired undocumented workers because he believed they were easier to control, grand jurors state in the indictment.
The most recent investigation by the U.S. Department of Labor began in 2020. Authorities said Loloee and Montoya lied to investigators. They also listened in on an interview with an employee, in an attempt to have them lie. Additionally, they told a worker to lie about her hire date. Others were told to hide from investigators, avoiding interviews.
Loloee also committed wire fraud when applying for Covid-19 relief from the Restaurant Revitalization Fund program, authorities said.
To get the funds, a restaurant needed to have a loss in gross receipts in 2020 when compared to the prior year. Loloee’s applications significantly under-reported two stores’ gross receipts, making them appear eligible for relief when they weren’t. He asked for over $2.2 million and received about $1.2 million.
Loloee and Montoya face a maximum of five years in prison and a $250,000 fine for each count of conspiracy to defraud the Department of Labor, immigration document fraud and obstruction of justice, as well as for each count of obstruction of an agency proceeding. They face a maximum of 10 years and $250,000 in fines for each count of possessing false immigration documents or use of a false document.
There’s a 20-year maximum sentence and $250,000 fine for each count of record falsification or wire fraud.
The recent investigation that led to Thursday’s indictment isn’t the first time authorities have probed Loloee’s business.
According to the indictment, Loloee was investigated in 2008 and 2009. That probe found he and his corporate entity owed employees back wages. Loloee agreed to pay almost $3,500 in that case.
A second investigation happened between 2018 and 2020. It also found that Loloee and his corporate entity owed back wages, and he agreed to pay back over $35,000.
The third investigation began in 2020. It led authorities to tell Loloee they would seek some $1.5 million in back wages, damages and penalties.
Loloee was first elected to the eight-member Sacramento council in November 2020. Before his election, he was the founder and CEO of his grocery chain. He has over 28 years of experience as an entrepreneur.
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