March 23, 2024 - A federal grand jury returned a 58-count superseding indictment Thursday adding new charges for Shahrir “Sean” Loloee, 53, of Granite Bay, and charging Sacramento residents Mirwais Shams, 36, and Ahmad “Shah” Shams, 29, for their participation in the fraud conspiracy, U.S. Attorney Phillip A. Talbert announced.

According to court documents, Loloee is the owner of the Viva Supermarkets chain of grocery stores, and Karla Montoya, 42, of Sacramento, is the general manager. Mirwais Shams was the controller and financial auditor of the Viva Supermarkets, and Ahmad Shams held various positions, including as the human resources director.

In December 2023, Loloee and Montoya were charged in the original indictment with conspiracy, obstruction of Department of Labor proceedings, and possession and use of false immigration documents. They are alleged to have employed a labor force with many workers who lacked employment authorization, to have reduced labor costs through unlawful means including by failing to pay overtime wages, and to have obstructed Department of Labor investigations into their employment practices. Loloee was additionally charged with falsification of records and a pandemic relief fraud scheme.

Thursday’s superseding indictment additionally charges Loloee with conspiracy to defraud the IRS, willful failure to collect or pay over withheld taxes, three counts of filing a false tax return, and three counts of money laundering. Mirwais Shams and Ahmad Shams are each charged with conspiracy to defraud the IRS and two counts of filing a false tax return. Ahmad Shams is additionally charged with two counts of perjury. According to court documents, beginning in November 2017, Mirwais Shams and Ahmad Shams used various methods to manipulate employee time data to lower Loloee’s on-the-books payroll, overtime pay, the federal payroll tax obligation, and the labor costs overall. At the direction of Loloee, Mirwais Shams and Ahmad Shams modified the number of hours of Viva Supermarkets employees recorded on the time clock in tens of thousands of instances, representing a significant percentage of all punch-clock recorded worker time. This deprived employees of overtime pay and deprived the IRS of the payroll tax obligation that Loloee would bear if true hours were reported. Loloee and both Shams also filed their own false tax returns that underreported their own income, and Ahmad Shams is charged with two counts of lying to a federal grand jury about taxes and off-the-books payments.

The superseding indictment further charges Loloee with three counts for money laundering fraudulently obtained COVID-19 pandemic relief funds. According to court documents, in May 2021 Loloee fraudulently applied for $2.2 million in COVID-19 relief from the Restaurant Revitalization Fund program (RRF) and received $1.2 million. After receiving the $1.2 million, Loloee initiated the laundering of funds with 10 checks all bearing the same issue date of June 18, 2021, moving the money through multiple accounts that he controlled. Loloee completed the laundering with three bank transfers that moved $949,900 into a trust account in the name of one of his family members.

This case is the product of an investigation by the IRS Criminal Investigation and Homeland Security Investigations. Assistant U.S. Attorneys Audrey B. Hemesath, Matthew Thuesen, and Kevin Khasigian are prosecuting the case.

This case was investigated with the assistance of the Tax Recovery in the Underground Economy (TRUE) Task Force includes the California Department of Justice, the California Employment Development Department, the California Department of Tax and Fee Administration, the Franchise Tax Board, the IRS Criminal Investigation and HSI. The TRUE Task Force was created to ensure multi-agency collaboration and to combat wage theft, tax evasion, and other crimes in the underground economy.

If convicted, the defendants face these maximum sentences for each count of the following charges: five years in prison and a fine of up to $250,000 for conspiracy to defraud the Department of Labor, to commit immigration document fraud, and to obstruct justice; 10 years in prison and a fine of up to $250,000 for conspiracy to defraud the IRS; 10 years in prison and a fine of up to $250,000 for possession of false immigration documents; five years in prison and a fine of up to $250,000 for possession, acceptance and receipt of false immigration documents; 20 years in prison and a fine of up to $250,000 for obstruction of agency proceeding; 20 years in prison and a fine of up to $250,000 for falsification of records; five years in prison and a fine of up to $10,000 for willful failure to collect or pay over tax; three years in prison and a fine of up to $100,000 for a false tax return; 20 years in prison and a fine of up to $250,000 for wire fraud; 20 years in prison and a fine of up to $500,000 for money laundering; and five years in prison and a fine of up to $250,000 for perjury.

Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.