Rep. Michael Grimm Could Face 257 Years in Prison For Tax Evasion, Perjury and Fraud
Representative Michael Grimm surrendered to the FBI on Monday morning on 20 -- count 'em! -- federal 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." O_O
Perhaps most shocking of all is that none of those charges are related to the alleged campaign finance violations for which Grimm is also reportedly under investigation by both the feds and the House Ethics Committee... Questions about which allegations, you may recall, prompted Grimm to threaten to throw a NY1 reporter "off this fucking balcony" at the State of the Union in January.
No, these particular charges are related to a restaurant called Healthalicious that Grimm managed before he was even elected to Congress. Grimm, who has represented Staten Island and parts of Brooklyn since 2011, is a republican, and the only one who represents any part of New York City.
After leaving the FBI where he worked as an undercover agent in 2006, Grimm opened Healthalicious on the Upper East Side. (If you're mildly repulsed by the name alone your instincts are serving you well. The Yelp reviews are very bad: "Long story short: This place put me in the hospital with the worst food poisoning I've ever had..." "...The guy who was preparing my salad was using one hand to prepare it and the other hand to pick his nose. No gloves..." "...I just can't excuse this kind of mediocrity...")
The U.S. attorney alleges that between 2007 and 2010, when Grimm was managing operations at the restaurant, he paid his employees (many of whom were not legal citizens) under the table in cash, and, in turn, vastly underreported to the government the amount he owed in payroll taxes, state taxes and federal taxes. (He underreported workers wages to the New York State Insurance Fund and, as a result, paid less in workers' compensation premiums too.) The U.S. attorney's office estimates Grimm concealed over $1 million in sales and wages from the government.
If you're having trouble following along, here's a handy graphic courtesy of the U.S. Attorney's Office, Eastern District of New York.
— Shimon Prokupecz (@ShimonPro) April 28, 2014
Oh, and those perjury and obstruction of justice charges?
The perjury and obstruction of justice charges stem from a 2013 lawsuit brought against Grimm by two former employees who claimed he did not pay them minimum wage or overtime pay. Speaking under oath during that suit, the U.S. attorney says the congressman lied about his duties at Healthalicious, including whether he paid his employees in cash, whether he interacted with payroll processing companies, whether he used email when conducting Healthalicious business, and whether he still had access to that email account.
On Monday U.S. Attorney Loretta Lynch, assistant director in charge of the FBI's New York field office George Venizelos, and Richard Weber, chief of the IRS' criminal investigation division issued a joint statement condemning Grimm's actions.
"In 2007, Michael Grimm, former Marine, former FBI agent, accountant and attorney, was poised for success as a small business owner," Lynch said.
Venizelos added with a flourish, "As a former FBI agent, Representative Grimm should understand the motto: fidelity, bravery, and integrity. Yet he broke our credo at nearly every turn... Representative Grimm lived by a new motto: fraud, perjury, and obstruction."
Rounding out the chorus was Weber, who issued a stern warning to tax evaders far and wide: "No matter your political position, how much power you have, how much money you make, or who you know, IRS-CI investigates all allegations of tax fraud."
On Monday, Grimm pleaded not guilty to all 20 counts. If convicted, Grimm faces a term of imprisonment of up to -- Twenty times 10, plus 20, plus 10, plus five, plus 10... Plus three times three, another three... Carry the one -- Grimm could face up to 257 years and six months in jail in all, to say nothing of the restitution and fines he may forced to pay.
Grimm, meanwhile, still plans to run for re-election this fall.
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