As expected, Rep. Michael Grimm was arrested on federal criminal charges early Monday morning after turning himself in to the FBI. Grimm pleaded not guilty to the charges against him during a Monday court appearance.
Update: According to the indictment, Grimm faces 20 charges as a result of the FBI's investigation. Those include five counts each of mail fraud and wire fraud, three counts of aiding and assisting in the preparation of false and fraudulent tax returns, one count of conspiring to defraud the U.S., one count of impeding the IRS, a count of health care fraud, one count of obstructing an official proceeding, two counts of perjury, and one count of employing unauthorized workers. The full indictment is below, but here's a key quote on the overall alleged scheme:
During the period in which GRIMM oversaw Healthalicious' day-today operations, in order to increase the profitability of the restaurant, he engaged in schemes to fraudulently under-report the wages he paid his workers - many of whom did not have legal status in the United States - and fraudulently under-report the true amount of money the restaurant earned to both federal and New York State tax and insurance authorities.
Specifically, GRIMM paid a significant portion of Healthalicious' employees' wages in cash and did not report those cash wages to federal and state authorities, thereby lowering the restaurant's payroll tax costs.
Grimm is accused of concealing about one million dollars in gross receipts, and hundreds of thousands of dollars in employee wages. He's also accused of perjury in a statement given under oath in 2013, while a sitting member of Congress. In a statement, FBI assistant director George Venizelos had this to say about the federal charges against the legislator:
“As a former F.B.I. agent, Representative Grimm should understand the motto: fidelity, bravery and integrity. Yet he broke our credo at nearly every turn. In this 20-count indictment, Representative Grimm lived by a new motto: fraud, perjury and obstruction.”
As we noted late on Friday, Grimm will likely be indicted on charges pertaining to a restaurant he owned before being elected to Congress in 2011. The charges could include wire fraud, mail fraud, and obstruction of justice. After leaving the FBI in 2006, Grimm operated a health food restaurant called Healthalicious on Manhattan's Upper East Side. He sold his stake in the restaurant before running for office, NBC notes. He now represents Staten Island in the U.S. House of Representatives.
Although the indictment focuses on the restaurant business itself, the charges do have a tangential connection to Grimm's campaign for the House, as the Washington Post reported:
The charges stem from his ownership of a Manhattan health-food restaurant that has ties to an Israeli fundraiser who served as a liaison between Grimm and a mystic, celebrity rabbi whose followers donated more than $500,000 to Grimm’s campaign in 2010. While the investigation has focused on Grimm’s fundraising, U.S. Attorney Loretta Lynch is expected to announce an indictment centered on his restaurant business,
One of Grimm's fundraisers was arrested in January as part of a probe into whether Grimm accepted illegal campaign contributions. However: so far, federal investigators have not accused Grimm himself of any wrongdoing on that front.
Grimm's lawyer William McGinley said last week that the Congressman was innocent of all charges. "When the dust settles, he will be vindicated," McGinley said in a statement.
Update 2: At a packed 1 p.m. press conference, Rep. Michael Grimm confirmed that he would not resign from office in the face of the federal allegations against him. "I'm gonna get back to work," Grimm said, adding that his legal team would "fight tooth and nail" against the charges until he is "fully exonerated."
The legislator once again denied that the allegations against him are true. He called the investigation and grand jury indictment "shameful, and disgraceful," and a "political witch hunt" designed to "assassinate his character" and "remove me from office."
Here's the full indictment: