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Rep. Michael Grimm indicted on charges of tax, mail fraud, perjury

- The Washington Times - Monday, April 28, 2014

Federal prosecutors on Monday accused Rep. Michael Grimm, a former FBI agent, of flouting state and federal tax laws in a 20-count indictment, which an FBI official said showed the lawmaker lived by a the new motto of “fraud, perjury and obstruction.”

The New York Republican, who had been under investigation for two years over possible campaign finance violations, was charged with health care, tax, mail and wire fraud in connection to a restaurant he owned prior to serving in Congress. The indictment said he underreported more than $1 million in gross receipts and hundreds of thousands of dollars of employees’ wages to the federal government.

The indictment also alleges that Mr. Grimm lied under oath in January 2013 when he was deposed about his role in operating the Manhattan restaurant called “Healthalicious,” “including falsely denying that he had paid Healthalicious‘ workers in cash” to avoid a paper trail.

Mr. Grimm, 44, pleaded not guilty in court Monday, telling reporters he and his legal team will fight “tooth and nail” until he’s exonerated and indicated he plans to seek re-election in the fall.

Mr. Grimm, who as released on $400,000 bail, said he felt “relieved” that after two-and-a-half years of anonymous attacks, he can finally confront what he called a “political witch hunt” to “assassinate my character and remove me from office.”

“I stand before you with humility,” he said, “but still proud. I know who I am and I know what I’ve done for this country for almost 20 years now. I know I’m a moral man, a man of integrity, and I also know I have a lot more service and leadership to provide this country.”

Mr. Grimm wrote a letter to House Speaker John A. Boehner on Monday asking the Ohio Republican to remove him from the House Financial Services Committee “in light of recent circumstances,” but saying that he intends to resume his responsibilities once his legal matters are resolved.

“The Speaker believes Rep. Grimm’s decision is appropriate under the circumstances,” Boehner spokesman Michael Steel said.

Minority Leader Nancy Pelosi, California Democrat, had written separately to Mr. Boehner asking Republicans to remove Mr. Grimm from the panel.

For two years, investigators had been examining his fundraising in the 2010 race and his involvement in the Manhattan restaurant. A House Ethics Committee announced in November that Mr. Grimm was under investigation for possible campaign finance violations.

During the 2010 race when he was first elected, Mr. Grimm acknowledged receiving $250,000 to $300,000 in contributions from followers of an Israeli rabbi, Yoshiyahu Yosef Pinto. Some members of Mr. Pinto’s congregation subsequently said they made tens of thousands of dollars in illegal contributions, including gifts passed through straw donors.

Mr. Grimm has denied knowledge of any improprieties. The Israeli businessman who had served as Mr. Grimm’s liaison to Mr. Pinto’s followers, Ofer Biton, pleaded guilty in August to an immigration fraud charge.

Three days after that guilty plea, the FBI filed a sealed criminal complaint accusing a Houston woman named Diana Durand, who had been romantically involved with Mr. Grimm, of using straw donors to make illegal campaign contributions.

On Friday, Ms. Durand was indicted in Brooklyn on those charges. She also was charged with making false statements to the FBI when she said she didn’t reimburse straw donors for their contributions to Mr. Grimm’s campaign.

Mr. Grimm made headlines in January after confronting a New York City cable news station reporter who tried to question him about a long-running FBI investigation into campaign finance while they were on a balcony in the Capitol.

“As a former FBI agent, Rep. Grimm should understand the motto: fidelity, bravery, and integrity. Yet he broke our credo at nearly every turn,” FBI Assistant Director George Venizelos said in a statement. “In this 20-count indictment, Rep. Grimm lived by a new motto: fraud, perjury, and obstruction.”

The indictment was the latest in a string of embarrassments for the House GOP caucus, which had been hoping to build momentum for what many saw as a strong midterm cycle for Republicans. Mr. Grimm’s legal woes follow on the resignation of Florida Rep. Trey Radel in the wake of a D.C. drug-buying sting and the announcement Monday that Louisiana Rep. Vance McAllister would not seek another term after the married congressman was caught on videotape kissing a staffer.

Three non-partisan political handicappers changed their outlook on the race Monday in light of the news. The Cook Political Report and the Rothenberg Political Report changed their ratings from “lean Republican” to “lean Democrat” and Larry Sabato’s Crystal Ball, moved it from “toss-up” to “lean Democrat.” He won re-election in 2012 with 52 percent of the vote in New York’s Staten Island-based 11th congressional district, which President Obama carried in 2012, also with 52 percent of the vote.

Former New York City Councilman Domenic Rechhia is running on the Democratic side.

• This article is based in part on wire service reports

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