- Associated Press - Monday, May 5, 2014

NEW YORK (AP) - A Houston woman romantically linked to embattled U.S. Rep. Michael Grimm pleaded not guilty on Monday to charges she lined up straw donors for him to circumvent campaign contribution limits.

Diana Durand entered the plea through her attorney one week after the Staten Island Republican pleaded not guilty to evading taxes in a private business venture before he was elected.

Durand, 48, who’s free on bail, declined to speak reporters outside the federal courthouse in Brooklyn. Her attorney portrayed her as a scapegoat in a two-year investigation of Grimm’s campaign finances that prosecutors say uncovered the alleged tax evasion, but so far has failed to produce any campaign finance charges against Grimm himself.

“I think it’s a troubling case,” said the lawyer, Stuart Kaplan. “We’re somewhat confused by it.”

Kaplan claimed the ex-girlfriend has no knowledge of how campaign financing works, adding he expects the case to go to trial. He described Durand and Grimm as still being close, but now out of touch because “each one is struggling with their own situation.”

Durand also is facing a charge of making false statements to the FBI when she said she didn’t reimburse straw donors for their contributions to Grimm’s campaign. Her lawyer identified a politician identified only as Candidate A in her indictment as Grimm.

The indictment against Grimm alleges the tax fraud began in 2007 after he retired from the FBI and began investing in an Upper East Side eatery called Healthalicious. It accuses him of under-reporting more than $1 million in wages and receipts to evade payroll, income and sales taxes, in part by paying his workers - some in the country illegally - in cash.

Grimm, 44, made headlines in January after telling a New York City cable news station reporter he wanted to throw him off a balcony in the Capitol for asking about the campaign finance inquiry.

Grimm is free on $400,000 bond. He’s vowed to stay in Congress and run for re-election while fighting the tax case.

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