If Loloee refuses to resign, indicted Sacramento councilman could keep his seat through 2024

Sean Loloee, who was indicted by a federal grand jury and charged Friday in connection with multiple allegations of wrongdoing at his Viva Supermarkets, might be able to keep his Sacramento City Council seat through the end of next year.

Mayor Darrell Steinberg hinted Friday that he wanted Loloee to resign immediately.

“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,” Steinberg said in a statement Friday morning. “I expect the situation to be resolved within the next 24 hours.”

Defiant before surrendering to U.S. Marshals at the federal courthouse downtown, Loloee said he would continue to serve on the council.

“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,” he said.

What happens if Loloee stays or goes?

If Loloee sticks to that plan and continues to ignore calls for his resignation, there is little if anything the council can do, according to city officials.

If a council member is arrested, it does not have any effect on their council seat, City Clerk Mindy Cuppy said.

The mayor and council do not have the ability to suspend an elected colleague; they can only pass a resolution admonishing him, according to Steinberg spokeswoman Mary Lynne Vellinga after speaking Friday with City Attorney Susana Alcala Wood.

That’s a different process than in the California Legislature, where Steinberg served as Senate president pro tem for nearly six years before leaving the Capitol in 2014. There, he led a successful effort to suspend three then-state senators who were facing federal charges.

If Loloee does resign, the nine-member council can appoint a person to fill the seat through December 2024.

In that scenario, it’s unlikely one of the nine candidates running for the North Sacramento seat in the March primary election would be picked. Former state Assemblyman Roger Dickinson of the Woodlake neighborhood is widely seen as the front-runner in the race, though some have said it should be someone from an underserved neighborhood, such as Del Paso Heights.

If no single candidate receives at least 50.01% of the vote, the general election will be held Nov. 5 and be sworn in the following month.

The council has made vacant appointments seven times since 1971; most recently was 2000 Joseph Yee was selected to Jimmie Yee’s council seat after Yee was appointed mayor for a year. Joseph Yee ran again 12 years later.

Indictment bolsters past allegations at Viva

Friday’s indictment, first reported by The Sacramento Bee, included charges of fraud, obstruction, falsifying records, wire fraud and using false immigration documents regarding his four Viva Supermarkets in the capital region. The indictment has many similar allegations to a federal civil lawsuit the U.S. Department of Labor filed in 2022, which alleged he fails to pay overtime or sick time, employs minors, and threatens to have employees deported.

The indictment, unsealed Friday, revealed new details about similar allegations regarding immigrants.

“Montoya, at Loloee’s direction, regularly hired undocumented workers at the Viva Supermarkets because it was Loloee’s view that undocumented workers were easier to control,” the indictment stated. “Loloee had knowledge of the practice of hiring undocumented workers and himself reviewed job applicants. ... By maintaining a workforce of undocumented workers, Loloee enriched himself in various ways, including by not paying them overtime wages that would otherwise be required.”

The charges follow a federal criminal raid on three of Loloee’s grocery stores in the Sacramento area (a fourth store is located in Dixon) and two houses in October.

Following the raid, Latino activists, as well as the Democratic Party of Sacramento County and the head of the Sacramento Central Labor Council, called on Loloee to resign.

Feds: Loloee lives in Granite Bay

Loloee also has been under scrutiny since The Bee in June 2021 reported he apparently did not live in the district, but instead in his wife’s $1.4 million Granite Bay house, where he was virtually sworn into council in 2020, then lied about it. He has maintained he lives in a Hagginwood house within his district with his employees — where 911 calls for guns and parties are frequent, and over a dozen vehicles and a mini excavator are parked, ongoing violations of city code. A city-commissioned outside investigation, which did not include interviews with neighbors, found he did indeed live in the Hagginwood house.

But, according to the indictment and news release by the U.S. Attorney’s Office, Loloee is identified as a resident of the ritzy Placer County enclave. When asked for clarification, a spokeswoman for U.S. Attorney Phil Talbert reiterated what federal investigators asserted.

“As part of the investigation, it was determined that his residence is in Granite Bay,” said spokeswoman Lauren Horwood.

Justice officials’ confirmation may provide an avenue for the council to remove him.

In California, if a city council member does not reside or have a domicile in the district they represent, the council could vote to declare the seat vacant, and the member would be replaced, or any individual could file a quo warranto lawsuit, said Fred Woocher, a Los Angeles-based election law attorney. An elected official who votes from a place they don’t live could face criminal charges for perjury and voter fraud, Woocher said. If convicted, the person would lose the council seat.

Loloee has cast votes using the Hagginwood house as his address in at least three elections.

The Bee’s Ryan Lillis contributed to this story.