Grimm Pleads Not Guilty To 20 Count Indictment Of Tax Fraud, Employing Undocumented Immigrants

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After turning himself into authorities yesterday morning, Republican Congressman Michael Grimm, a former FBI agent, pleaded not guilty to a 20-count indictment alleging the local pol hid more than $1 million in sales at a business he owned to avoid paying taxes, as well as illegally employing undocumented immigrants.

The charges surround the operations of Upper East Side eatery Healthalicious, a venture he ran from 2007 to 2010. However, he’s also charged with perjury for lying to investigators about the business’ operations when he was questioned in 2013, while already serving in the House of Representatives.

“Grimm made the choice to go from upholding the law to breaking it. In so doing he turned his back on every oath he had ever taken. Even after his return to public service, when called to account for his actions and questioned under oath Grimm went for the cover up, and lied about his role in his own business,” said U.S. attorney Loretta E. Lynch, who is prosecuting the case.

Lynch accused Grimm of under-reporting workers’ wages, many of whom were illegally working in the U.S., and also underreported the amount of money earned through the business – dodging local and federal tax liabilities by hundreds of thousands of dollars.

When Grimm was questioned by authorities representing Healthalicious employees suing him in 2013 as part of a federal lawsuit, he allegedly lied under oath hide the company’s questionable practices, including denying that he paid workers cash.

The entire indictment can be read here [pdf]. He is charged with perjury, wire fraud, mail fraud, obstruction of justice, employment of illegal immigrants, obstructing and impeding tax laws, and conspiracy to defraud the United States – among others. He faces up to 257.5 years in prison.

The pol, who represents all of Staten Island as well as a large swath of Southern Brooklyn that includes Bay Ridge, Bensonhurst, Gravesend and Sheepshead Bay, was released on $400,000 bail after pleading not guilty yesterday.

The charges were somewhat surprising, as many believed that Grimm would eventually be the target of an indictment for campaign fundraising violations following an investigation that has been ongoing for at least two years. Although several associates of the pol have been busted in relation to that investigation, it appears the government seized on his business dealings after failing to connect fundraising improprieties directly to the elected official.

But Lynch said yesterday that the current charges could be expanded as the investigation continues.

The New York Times reports:

Loretta E. Lynch, the United States attorney for the Eastern District of New York, did not detail why the investigation had changed. “Whenever there’s an investigation into someone’s business activities, it is usually very broad-reaching,” she said, adding that a larger investigation was continuing.

But, she said, Mr. Grimm had a sophisticated understanding of the law and finance, thanks in part to his background as an F.B.I. agent, where he did undercover work on Wall Street.

Aside from his work at the FBI, Grimm was an accountant.

Grimm remained defiant after appearing in court, holding a press conference where he described the investigation as a “political witch hunt” and vowed to continue his campaign for reelection.

The congressman did forfeit his seat on the House Financial Services Committee as a result of yesterday’s indictment.

Lynch said that her office will now also begin reviewing the cases he worked while at the FBI for potential malfeasance.