(FOX40.COM) — Sacramento City Councilman Sean Loloee could face over 100 years in prison and millions of dollars in fines if found guilty on federal charges that center mostly around the hiring and intimidation of employees at the Sacramento-area grocery stores he owns.
Here are some of the details contained in the federal grand jury's indictment.
Intimidation and Spying
The U.S. Department of Justice said Loloee hired employees who lacked authorization to work in the United States in part because they were easier to control and allowed him to pay lower wages. Their questionable legal status allowed Loloee to pay the workers in "irregular ways and off the books" and avoid paying overtime because he knew they lacked negotiating leverage.
The DOJ said Loloee and Viva Supermarket General Manager Karla Montoya instructed employees to obtain false documents to facilitate their hiring.
According to the DOJ, Montoya, whom Loloee hired in 2008, also lacked work authorization.
Court documents allege that Loloee and Montoya used various methods to control the undocumented workforce including:
- Saying Loloee knew who was "illegal" to create an atmosphere of intimidation
- Threatening workers with adverse immigration consequences if they acted against Loloee's interests
- Requiring employees who did not speak English to sign untranslated documents as a condition of employment and then threatening the employee with the content of the documents
- Saying Loloee knew where the employees lived, suggesting they were vulnerable to being turned in to immigration authorities
- Saying Loloee knew many important people who could investigate members of the workforce in order to intimidate them
Loloee allegedly held a meeting amid an investigation in 2020 where he said he wanted to know if the workers were with him or against him and said that if they were against him they should leave.
The DOJ also alleges that employees were sometimes instructed to act as government officials to identify workers who would cooperate with investigations.
The DOJ said that at one point, a person was paid to act as a customer and follow an agency investigator around the store and listen in on conversations with employees.
Loloee and Montoya are both accused of listening in on an employee interview with an agent in order to influence the answers the employee provided.
The DOJ also said that workers were instructed to remove their uniforms in order to appear as customers when agency investigators were in the store.
Green Checks
One of the methods Loloee and Montoya used to allegedly avoid paying overtime involved issuing checks from another company belonging to Loloee, Fresh Pak Produce, which employees understood could not be cashed at financial institutions.
Court documents state that the checks, issued on green paper, many of which said "Void" on the front, were instead to be cashed at the Western Union located inside the Viva Supermarket.
Employees were then charged 2% to cash the checks inside the store, the Department of Justice alleges.
Employees who received green checks also sometimes were allegedly made to receive part of their pay in the form of a Viva Supermarket store voucher, given to them when they cashed the check at the in-store Western Union.
When asked about the green checks by investigators, Loloee said that the office had been broken into and suggested that the green checks had been stolen.
Switch from Hourly wages to Salary
The DOJ said that in 2020, to avoid overtime wages, some employees were transitioned from being paid hourly wages to salary positions. Salaried employees were sometimes paid a lower salary than their hourly wage had been.
The DOJ said that the responsibilities of the positions "did not correspond to job duties exempted from overtime pay requirements of the Fair Labor Standards Act."
Back Pay Settlement Requested Back
Since 2008, Viva Supermarkets have been the subject of three investigations of the Department of Labor's Hour and Wage Division.
The first investigation, which ended in May 2009, resulted in an agreement to pay roughly $3,500 in back wages to several employees.
The second investigation, which ended in February 2020, resulted in an agreement to pay about $35,000 in back wages.
The DOJ said that after the second settlement payments were made to employees, Loloee and Montoya told workers to deposit the money into their bank accounts but then return it to Loloee.
Montoya allegedly told an employee that Loloee "was obligated to pay the employees with the settlement checks but reemphasized that nothing was owed to the employees."
After the third investigation, which started in September 2020, the Department of Labor said it was seeking "approximately $1,500,000 in back wages, liquidated damages, and civil monetary penalties."