Former Sacramento City Council member Shahriar “Sean” Loloee was engaged in a romantic relationship with an employee living rent-free in his North Sacramento home while committing financial crimes, federal prosecutors alleged during a court hearing on Wednesday, Oct. 1, 2026. Loloee previously pleaded guilty in April 2026 to tax fraud and illegally obtaining over $1.2 million in federal COVID-19 relief funds for his Viva Supermarket stores.
As Loloee and three co-defendants await their Nov. 19, 2026, sentencings, the fourth and final defendant, Karla Montoya, has chosen to take her case to trial. Montoya’s trial began on Sept. 30, 2026, at the Robert T. Matsui United States Courthouse in Sacramento before U.S. Judge Troy L. Nunley.
Prosecution Arguments and Witness Testimony in Montoya Trial
Assistant U.S. Attorney Audrey Hemesath stated during the Wednesday hearing that prosecutors plan to present firsthand witness testimony establishing the romantic relationship between Loloee and Montoya. The government argues this relationship makes it more likely that the two operated as co-defendants in the financial conspiracy.
Montoya faces multiple federal charges, including conspiracy to defraud the United States, possession and use of false immigration documents, and obstruction of agency proceedings. Prosecutors allege that while working as a manager for Viva Supermarkets, Montoya lived without paying rent in a Hagginwood neighborhood property owned by Loloee. Federal investigators previously verified that Loloee used this address on official city candidate documents when running for the City Council, despite actually residing in a $2.4 million Granite Bay home with his family.
Defense Strategy Regarding Residence and Immigration Status
Defense attorney Jai Gohel dismissed the prosecution’s romantic relationship claims as workplace gossip, arguing that introducing the allegation could unfairly bias jurors against Montoya’s character. Gohel maintained that while Montoya did live in the Hagginwood residence, she shared the home with her husband and two children rather than Loloee.
Judge Nunley ruled that prosecutors may introduce evidence regarding the living arrangements during the trial without explicitly emphasizing an affair. Nunley also granted a defense request to exclude Montoya's current immigration status from the proceedings, though her immigration status at the time of the alleged offenses is admissible as relevant evidence.
Sentencing Timeline for Co-Defendants
Loloee resigned from his City Council seat in January 2024 following a federal criminal indictment filed in 2023. That indictment detailed allegations that Loloee and his co-defendants engaged in a multi-year scheme to employ undocumented workers, pay sub-minimum wages, and use threats of deportation to prevent reporting.
While Loloee faces potential prison time and an order to pay nearly $2.4 million in restitution—including $240,000 owed to the Internal Revenue Service—other defendants have reached plea agreements. Brothers Mirwais and Ahmad Shams, who continue to work at the Viva supermarket chain, pleaded guilty in August 2026 to filing false tax returns. Both are scheduled for sentencing alongside Loloee on Nov. 19, 2026, and do not face prison sentences. Loloee retains ownership of the Viva Supermarket chain.
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