Sacramento councilman charged with illegally hiring workers, wire fraud and blocking federal probe

A Sacramento city councilman has pleaded not guilty to federal charges that he hired undocumented workers at his local Viva Supermarket stores, underpaid them and cheated the government on COVID-19 relief funds

SACRAMENTO, Calif. -- A Sacramento City Council member pleaded not guilty Friday to federal charges that he hired undocumented workers at his local grocery stores, underpaid them and cheated the government on COVID-19 relief funds.

Council member Sean Loloee and Karla Montoya, the general manager of Loloee's four Viva Supermarket stores, entered not guilty pleas to conspiracy to defraud the U.S. Department of Labor, possession and use of false immigration documents, obstruction of agency proceedings and wire fraud.

Loloee also pleaded not guilty to charges that he falsified records and took park in a pandemic relief fraud scheme, said a statement from the U.S. attorney's office. Both were ordered released from custody.

“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,” Loloee said in a statement to KTXL-TV and the Sacramento Bee.

According to the Bee, Montoya's attorney, William Portanova, told the court that she “is a hard-working mother" who has "raised a family, paid her taxes, and she is unfortunately in this situation at this moment. But, by the end of it, we expect to remove her from the situation.”