Congressman who threatened reporter now faces tax evasion charges
WASHINGTON — U.S. Rep. Michael Grimm failed to report more than $1 million in sales and wages at his former Manhattan restaurant, using unreported cash to pay undocumented workers “off the books” to “evade taxes and keep more money for himself,” a U.S. attorney told reporters Monday.
An indictment unsealed Monday in federal court in Brooklyn charges Grimm — a former FBI agent who used to investigate fraud — with 20 counts, including mail fraud, wire fraud, filing false tax returns and hiring unauthorized aliens, U.S. Attorney Loretta E. Lynch told reporters in New York.
Grimm, R-New York, also is charged with perjury, accused of lying to investigators about the alleged tax evasion scheme after he left the restaurant for his seat in Congress.
He “never met a tax he didn’t lie to evade,” U.S. Attorney Loretta E. Lynch told reporters in New York.
The charges relate to Grimm’s operation of Healthalicious restaurant from 2007 to 2010 — after he left the FBI but before he went to Washington following his 2010 election. He represents Staten Island and parts of Brooklyn.
The indictment comes after a two-year FBI investigation that ranged from his business dealings to his first campaign for Congress in 2010, according to U.S. officials briefed on the matter.
An attorney for Grimm, William McGinley, said earlier that the “U.S. Attorney’s Office has disclosed its intent to file criminal charges” against the congressman, and that Grimm “asserts his innocence of any wrongdoing.”
Grimm, as an accountant, attorney, former Marine and ex-FBI agent, “was poised for success as a small business owner,” but “made the choice to go from upholding the law to breaking it,” Lynch said in a news release.
Much of the alleged scheme involved the hard cash that customers paid at the cash register, as opposed to credit or debit payments that created a paper record, Lynch said.
The restaurant, in which Grimm had a 45% partnership interest, didn’t report some of the cash as income, Lynch’s office said. The restaurant also used cash to pay some workers, and then didn’t report the payments to taxing authorities, Lynch’s office said.
“Many employees received approximately half of their weekly pay in cash and the other half by check or through direct deposit into a bank account, while others received their entire weekly pay in cash,” the news release said.
Grimm also is charged with conspiring to commit health care fraud and obstructing an official proceeding.
The 44-year-old two-term Republican lawmaker from New York made headlines when he was shown on camera threatening to throw a reporter over a Capitol Hill balcony after an interview following the State of the Union address in January.
Before the indictment was unsealed, Grimm’s attorney, McGinley, said that “we are disappointed by the government’s decision (to prosecute), but hardly surprised,” and that Grimm would remain in office and would be vindicated.
He said the investigation has been “plagued by malicious leaks, violations of grand jury secrecy, and strong-arm tactics.”
“From the beginning, the government has pursued a politically driven vendetta against Congressman Grimm and not an independent search for the truth.”
In recent months, public attention also has focused on Grimm’s campaign donations after a friend and donor was charged with funneling illegal contributions to Grimm’s campaign four years ago. The investigation into campaign finance is still ongoing, U.S. officials briefed on the matter have said.
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