STOCKTON — Lodi City Councilman Shakir “Shak” Khan was formally arraigned in San Joaquin County Superior Court Tuesday afternoon on gambling, money laundering and tax evasion charges stemming from an arrest last year.
Khan appeared before Judge Ronald Northup at 1:30 p.m. Tuesday, and was charged with additional counts of Employment Development Department fraud.
He appeared alongside Kazir Khan, and both men were released on their own recognizance.
Both will reappear before Northup on Oct. 26 with Mohammed Khan, who will be facing his first arraignment upon his arrival to the country from Pakistan, the San Joaquin County District Attorney’s Office said.
“Cases involving money laundering, fraud, and tax evasion are very complex and require an inordinate amount of resources to prove,” District Attorney Tori Verber Salazar said in a media statement Tuesday.
“Integrity matters, the truth matters, and our office prosecutes those who prey on and take advantage of marginalized communities,” she said.
The San Joaquin County Sheriff’s Office said the defendants had been allegedly conducting illegal gaming out of their two businesses in Stockton and were laundering the profits.
In addition, several fraudulent EDD charges were filed against Shakir Khan for “unlawfully receiving money from the state during the pandemic relief efforts,” Tuesday’s media statement said.
Shakir Khan was arrested on Oct. 28 last year, a week before he was elected to the council’s 4th District seat.
The Sheriff’s Office at the time said he was one of seven arrested during a weeks-long investigation into illegal gambling establishments throughout the county.
He was released from San Joaquin County Jail later that evening.
Shakir Khan emailed a comment from his attorney Allen Sawyer to the News-Sentinel Tuesday afternoon. In the email, Sawyer said his client sold the business in question before it had been involved in Internet gambling.
“Mr. Khan denies these charges and looks forward to clearing his name,” Sawyer said. “None of these allegations involve his office of City Council. Mr. Khan has no intentions of resigning his office. Mr. Khan asks the public that they withhold judgment and that he be afforded the presumption of innocence.”
According to the 45-page complaint filed against Khan, he had been allowing illegal gambling to occur at the American Smokers Club, located at 2620 E. Waterloo Road in Stockton, between Feb. 14, 2018 and Sept. 7, 2020.
Zakir Khan had been permitting illegal gambling activities at the One Stop Smoke Shop, located at 2525 E. Fremont St. in Stockton, between Feb. 4 and Oct. 28, 2020, the complaint states.
On Aug. 2 of last year, Khan also allegedly provided a false statement to the EDD regarding unemployment compensation for himself, as well as for another individual.
The complaint states he made another false statement to EDD regarding unemployment compensation for two additional individuals on Aug. 22, and another individual on Aug. 29. He allegedly made additional false statements for three other individuals on Aug. 31, 2020.
He is also accused of committing grand theft on Aug. 2, 2020, receiving a minimum of $950 from the EDD, the complaint states.
In all, Shakir Khan faces 63 felony counts, including 41 counts for money laundering totaling millions of dollars, four counts of filing false tax returns and five counts of possessing illegal gambling machines.
The District Attorney’s Office said Shak and Kazie Khan have been placed on pre-trial monitoring and are searchable for any evidence of gambling. They must also surrender their passports and are not allowed to leave the state.
Asset forfeiture documents have also been filed in order to seize properties supposedly acquired with illegal funds, according to Tuesday’s media statement.
Shakir Khan, Kazir Khan and Mohammed Khan will appear in court at 8:30 a.m. on Oct. 26 for further arraignment.
This story was updated at 7:52 p.m. Tuesday, Sept. 8.