SACRAMENTO, Calif. (AP) — A Sacramento City Council member pleaded not guilty Friday to federal charges that he hired undocumented workers at his local grocery stores, underpaid them and cheated the government on COVID-19 relief funds.

Council member Sean Loloee and Karla Montoya, the general manager of Loloee’s four Viva Supermarket stores, entered not guilty pleas to conspiracy to defraud the U.S. Department of Labor, possession and use of false immigration documents, obstruction of agency proceedings and wire fraud.

Loloee also pleaded not guilty to charges that he falsified records and took park in a pandemic relief fraud scheme, said a statement from the U.S. attorney’s office. Both were ordered released from custody.

“Today’s news comes as a shock, particularly since 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,” Loloee said in a statement to KTXL-TV and the Sacramento Bee.

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According to the Bee, Montoya’s attorney, William Portanova, told the court that she “is a hard-working mother” who has “raised a family, paid her taxes, and she is unfortunately in this situation at this moment. But, by the end of it, we expect to remove her from the situation.”

Loloee, whose term of office expires in December 2024, has been under pressure to resign since federal investigators raided his stores and home in October. Loloee has said he won’t seek reelection.

An indictment issued by a federal grand jury alleges that since 2008, Loloee and Montoya conspired to employ many workers who lacked authorization to work in the United States and didn’t pay them overtime in a bid to reduce labor costs.

Loloee and his manager controlled the workers through intimidation tactics, prosecutors alleged, including making threats involving immigration authorities and making workers who didn’t speak English sign untranslated documents before employing them, prosecutors said.

Workers were paid in cash or in “green checks” that could only be cashed in the store, with workers forced to pay a surcharge for the service, prosecutors said.

Some workers were told to get phony documents, prosecutors said.

The indictment said fraudulent Social Security and Permanent Resident cards were found in the personnel files of at least 289 Viva employees.

When Department of Labor investigators began looking into the supermarket chain, Loloee used various tactics to thwart the investigation, including lying to investigators and providing them with false documents, threatening employees and ordering them to lie about their jobs, prosecutors said.

If convicted, Loloee and Montoya could face up to 20 years in prison for wire fraud and lesser sentences for other charges.