Grimm day for local pol, indicted for fraud and more

April 28, 2014 Helen Klein
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After a two-year probe into his campaign finances, Republican Congressmember Michael Grimm has been indicted on charges related to a business he ran from 2007 to 2010.

The 20-count indictment was announced on Monday, April 28, by U.S. Attorney for the Eastern District of New York Loretta Lynch at her office in downtown Brooklyn. Grimm had surrendered to federal authorities earlier in the day, and was arraigned at noon at the U.S. Courthouse in Brooklyn. He pleaded not guilty and was released on $400,000 bail.

Grimm – a former Marine and former FBI agent who has represented Staten Island and southwest Brooklyn in Congress since 2011, and who is up for re-election this year – now faces a laundry list of charges, including five counts of mail fraud, five counts of wire fraud, three counts of aiding and assisting in the preparation of false federal tax returns, one count of conspiring to defraud the United States, one count of impeding the Internal Revenue Service, one count of health care fraud, one count of engaging in a pattern or practice of hiring and continuing to employ unauthorized aliens, two counts of perjury and one count of obstructing an official proceeding.

“In 2007,” said Lynch, “Michael Grimm, former Marine, former FBI agent, accountant and attorney, was poised for success as a small business owner. Instead, as alleged, 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.”

George Venizelos, assistant director in charge of the FBI’s New York Field Office, concurred. Saying it was “A sad day for the FBI,” he asserted, “As a former FBI 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. We demand the best from our political leaders. Yet today, we again find ourselves expecting and rightfully wanting more.”

All the charges arise from a business Grimm owned, Healthalicious, a small fast food eatery in Manhattan, with federal officials alleging that the congressmember under-reported income at the restaurant by more than $1 million, and paid employees hundreds of thousands of dollars in wages “off the books.”

Lynch acknowledged that the charges had arisen from a larger investigation — likely the one that has been ongoing into his campaign finances – but would not say if further charges would be forthcoming. “The larger investigation is still continuing,” she told reporters. “These charges developed as we investigated Congressman Grimm’s business activities.”

Venizelos said that the FBI would be reviewing cases on which Grimm had worked.

After his court appearance, Grimm proclaimed his innocence, stating, “I know I’m a moral man, a man of integrity and I also know that I have a lot more service and leadership to provide this country. I’m going to get back to work. I will not abandon my post or the wonderful people who entrusted me to represent them.”

Grimm’s attorney William McGinley preempted the announcement of the indictment, on Friday, April 24 releasing a statement that called the then-pending indictment “a politically driven vendetta.

“After more than two years of investigation plagued by malicious leaks, violations of grand jury secrecy, and strong-arm tactics,” said McGinley, “the U.S. attorney’s office has disclosed its intent to file criminal charges against Congressman Grimm. When the dust settles, he will be vindicated. Until then, he will continue to serve his constituents with the same dedication and tenacity that has characterized his lifetime of public service as a member of Congress, Marine Corps combat veteran and decorated FBI special agent.”

But, questioned as to the timing of the indictment – just days after the April 14 filing deadlines for candidates in the race for Congress, meaning that the GOP will likely be stuck with Grimm on the ballot in November — Lynch asserted at the press conference that indictments are brought when they are ready, and are not in any way related to a political calendar.

“We follow the evidence and see where it goes,” she said. “We bring it when it is ready. We have to set all of that [politics] aside and follow the evidence.”

This is the latest installment in the saga of legal troubles that have plagued Grimm.

Just a couple of months ago, a friend of Grimm’s, Diana Durand, was indicted in Eastern District Court for alleged campaign finance irregularities. Previously, Ofer Biton, a fundraiser for Grimm, pleaded guilty to visa fraud after having been embroiled in an investigation of his money-raising efforts on behalf of the congressmember in Grimm’s first run for office in 2009-2010.

Grimm took office in 2011, defeating one-term Democratic incumbent Michael McMahon, who ran successfully for the seat against Republican Robert Straniere after long-term incumbent Republican Vito Fossella declined to run for re-election in the wake of the revelation that the married pol with a family on Staten Island had a second family in the suburbs of Washington D.C.

Should Grimm be convicted, he faces up to 20 years in prison.

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