A former Sacramento City Council member pleaded guilty Thursday to fraud schemes tied to his supermarket chain involving millions in COVID-19-era relief funds and hundreds of thousands of dollars lost in taxes to the IRS, the U.S. Department of Justice said. Previous coverage in the video player aboveSean Loloee, 55, took a guilty plea agreement for one count of conspiracy to obstruct a Department of Labor investigation, one count of conspiracy to defraud the IRS, three counts of filing false tax returns, one count of wire fraud and one count of money laundering.Loloee resigned from his city council seat in January 2024 as federal investigators probed his labor practices at his Viva Supermarket chain.An indictment found that Loloee hired undocumented workers “because it was Loloee’s view that undocumented workers were easier to control.” Read the full indictment here.The Department of Labor investigated Loloee and his supermarkets on three separate occasions between 2008 and 2020, the DOJ said in a news release. It went on to say that Loloee and other others were not only aware that the hired staff were working in the country illegally, but that they took steps to discourage employees from complying with the Department of Labor’s investigations.The DOJ said Loloee and others directed staff to lie about aspects of their employment, lied about how many staff were undocumented to reduce the amount of back wages, falsified hire dates on a list to DOL and gave false statements about the company’s history of paying employees off the books.”Loloee used irregular payment methods that allowed him to underreport both his federal payroll tax and his own personal income tax,” the DOJ’s release read. “He, together with his co-conspirators, maintained two sets of books—one that was used to submit filings to the IRS and one that was dubbed ‘Excess Payroll’ and used internally to track hidden payments to undocumented workers and others including to himself.”The DOJ estimates that using a second set of books caused a tax loss of about $200,000 to the IRS. Loloee also avoided being liable for $32,103 in taxes by not reporting wages he paid himself.According to the DOJ, Loloee also received $1.2 million through fraudulently applying for COVID-19 business relief funds. He used 10 checks, all with the same issue date of June 18, 2021, to move the money through multiple accounts. That resulted in a trust account of $949,000 in the name of one of his family members.Loloee has a sentencing date for Oct. 15. The DOJ said he faces a maximum sentence of 58 years in prison and up to $1.35 million in fines, but the actual sentence will be determined by the court.In March 2025, a judge denied a motion by Loloee that would have tossed out evidence filed against him. He also previously dismissed the investigation as a political move.See more coverage of top California stories here | Download our app | Subscribe to our morning newsletter | Find us on YouTube here and subscribe to our channel

SACRAMENTO, Calif. —

A former Sacramento City Council member pleaded guilty Thursday to fraud schemes tied to his supermarket chain involving millions in COVID-19-era relief funds and hundreds of thousands of dollars lost in taxes to the IRS, the U.S. Department of Justice said.

Previous coverage in the video player above

Sean Loloee, 55, took a guilty plea agreement for one count of conspiracy to obstruct a Department of Labor investigation, one count of conspiracy to defraud the IRS, three counts of filing false tax returns, one count of wire fraud and one count of money laundering.

Loloee resigned from his city council seat in January 2024 as federal investigators probed his labor practices at his Viva Supermarket chain.

An indictment found that Loloee hired undocumented workers “because it was Loloee’s view that undocumented workers were easier to control.”

Read the full indictment here.

The Department of Labor investigated Loloee and his supermarkets on three separate occasions between 2008 and 2020, the DOJ said in a news release. It went on to say that Loloee and other others were not only aware that the hired staff were working in the country illegally, but that they took steps to discourage employees from complying with the Department of Labor’s investigations.

The DOJ said Loloee and others directed staff to lie about aspects of their employment, lied about how many staff were undocumented to reduce the amount of back wages, falsified hire dates on a list to DOL and gave false statements about the company’s history of paying employees off the books.

“Loloee used irregular payment methods that allowed him to underreport both his federal payroll tax and his own personal income tax,” the DOJ’s release read. “He, together with his co-conspirators, maintained two sets of books—one that was used to submit filings to the IRS and one that was dubbed ‘Excess Payroll’ and used internally to track hidden payments to undocumented workers and others including to himself.”

The DOJ estimates that using a second set of books caused a tax loss of about $200,000 to the IRS. Loloee also avoided being liable for $32,103 in taxes by not reporting wages he paid himself.

According to the DOJ, Loloee also received $1.2 million through fraudulently applying for COVID-19 business relief funds. He used 10 checks, all with the same issue date of June 18, 2021, to move the money through multiple accounts. That resulted in a trust account of $949,000 in the name of one of his family members.

Loloee has a sentencing date for Oct. 15. The DOJ said he faces a maximum sentence of 58 years in prison and up to $1.35 million in fines, but the actual sentence will be determined by the court.

In March 2025, a judge denied a motion by Loloee that would have tossed out evidence filed against him. He also previously dismissed the investigation as a political move.

See more coverage of top California stories here | Download our app | Subscribe to our morning newsletter | Find us on YouTube here and subscribe to our channel