NEW YORK—Republican congressman for Staten Island U.S. Rep. Michael Grimm received a 20-count federal indictment Monday for mail, wire, and tax fraud charges. He pleaded not guilty to all charges through his lawyer at a federal court in Brooklyn.
Grimm has been the target of a campaign finance investigation for two years, but the indictments unsealed on Monday are related to tax evasion and other charges connected to running Healthalicious, a small restaurant on Manhattan’s Upper East Side. He left the business in 2010, the same year he won his first term in Congress.
The first-term congressman surrendered to FBI agents Monday morning and was released on a $400,000 bond secured by his Staten Island home.
Later in the day, Grimm also stepped down from the House Financial Services Committee.
At a press conference across the street from the courthouse on Monday, Grimm accused prosecutors of leaking “all kinds of innuendos and accusations to support a political witch hunt” intended to “assassinate my character.” He vowed to return to work in Congress while fighting the charges.
“I stand before you with humility, but still proud,” said a defiant Grimm. “I know I’m a moral man, a man of integrity.”
He is due back in court May 19, but said during the press conference that he would continue to work on behalf of his constituents on Staten Island who were hit extremely hard by Superstorm Sandy. He also said he will also run in the upcoming November race for re-election. His district includes all of Staten Island and parts of southwest Brooklyn.
“Here’s what’s going to happen: I’m going to get back to work,” he said. “We’re going to fight tooth and nail until I’m exonerated.”
The defense attorneys representing Grimm, John and Elizabeth Kase, are both based in New York City. Mrs. Kase called the indictments part of a “calculated campaign.”
A Sensitive Matter
A former U.S. Marine and FBI agent, Grimm has a reputation as straight-talking and sometimes temperamental. In January, he threatened to throw NY1 reporter Michael Scotto over a balcony after he asked about the ongoing investigation. He publicly apologized to the reporter the next day.
The indictments over private business practices in the federal investigation came as a surprising twist in an investigation that started out digging into campaign finance violations.
“The Department of Justice follows the facts where they lead,” said Justin Weddle, an attorney at the law firm Brown Rudnick LLP and former prosecutor, by phone on Monday. Weddle added that in a case like Grimm’s, however, federal prosecutors would likely use extra caution.
“It’s a momentous thing to indict a congressman,” said Weddle. “There’s extra oversight.”
U.S. Attorney Loretta Lynch said investigators uncovered the restaurant fraud in the course of the campaign finance probe and denied that the prosecution was politically motivated. She also alluded that other charges could emerge, stating, “The investigation is broader and ongoing.”
De Blasio, Staten Island
Also on Monday, Mayor Bill de Blasio made it plain that he supports Grimm’s opponent in the upcoming election. The mayor and congressman have had a rocky few months as the city has struggled to move forward with a Sandy recovery agenda.
“I’ve endorsed Domenic Recchia,” said de Blasio when asked about Grimm’s indictment. “I’ve felt for a long time that Domenic Recchia was going to win that race. I feel it even more strongly today.”
He added that the indictments came as no surprise to him.
“I think it’s something that’s been anticipated for a long time.”
The 20-count indictment alleges that tax fraud started in 2007 after Grimm retired from the FBI and invested in the Upper East Side restaurant Healthalicious. He is accused of trying to evade payroll, income, and sales taxes by paying his workers in cash, some of whom were not legally allowed to work in the United States. He is also charged with physically handing out “cash payments to his employees on numerous occasions.”
On Staten Island, constituents were reserving judgment until the situation plays out.
Eddie Garcia, 70, who’s retired, said he voted for Grimm. He credited the congressman with helping Staten Island recover from Superstorm Sandy and said Grimm is being prosecuted “because he is a rising star in the Republican Party.”
“They think they got him,” said Garcia. “I hope justice will prevail.”
The Associated Press contributed to this report.