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New York GOP Congressman Michael Grimm Indicted For Fraud

crime-handcuffs

As expected, Congressman Michael Grimm was taken into custody today and indicted on multiple counts of fraud:

Representative Michael G. Grimm, a second-term congressman from Staten Island, was indicted Monday on federal fraud charges for underreporting the wages and payroll while running an Upper East Side restaurant, concealing the actual payroll in a separate set of computer records.

The charges, unsealed Monday, detail how Mr. Grimm concealed more than $1 million in gross receipts for the restaurant, and hundreds of thousands of dollars in employee wages, thus getting around federal and New York State law. He also lied under oath in January 2013, while he was a member of Congress, during a deposition, the indictment says.

The indictment charges Mr. Grimm with, among other things, perjury, wire fraud, mail fraud, obstruction of justice, employment of illegal immigrants, obstructing and impeding tax laws, and conspiracy to defraud the United States.

Mr. Grimm, 44, is a former F.B.I. agent and Marine who emphasized his upright image as he ran for Congress, where he is a Republican representing Staten Island and parts of Brooklyn. He surrendered to federal authorities early Monday, and was expected to later appear in Federal District Court in Brooklyn.

After leaving the F.B.I. in 2006, Mr. Grimm opened a health-food restaurant in Manhattan called Healthalicious, on Second Avenue near 83rd Street.

Between 2007 and 2010, the indictment says, Mr. Grimm paid “a significant portion” of employees’ wages in cash, with many employees receiving about half their pay through direct deposit or check, and the other half in cash. He kept two sets of payroll records, and concealed the set that detailed what he was actually paying from payroll-processing companies and an accountant. That led to the payroll companies inadvertently filing erroneous tax forms, since the forms were based on the fake records.

In some cases, the indictment says, Mr. Grimm paid employees entirely in cash so that the payroll processors had no records of those employees at all.

Grimm, of course, is innocent until proven guilty but, as I noted on Saturday, this indictment will have a political impact on Grimm, the sole Republican Member of Congres from New York City. The deadline for another candidate to get on the ballot to challenge Grimm in a Republican Primary has passed, so absent some Court Order that allows the GOP to replace Grimm on the ballot he would be standing for re-election in November. While the District he represents is strongly Republican, one doubts that the voters of Staten Island and Brooklyn are going to be all that thrilled about voting for a man under Federal Indictment.

Here’s the indictment:

United States v. Michael Grimm by Doug Mataconis

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About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May, 2010 and also writes at Below The Beltway. Follow Doug on Twitter | Facebook

Comments

  1. Mu says:

    Can a felon stay a member of congress, and who would have the authority to remove him if he wouldn’t leave voluntarily?

    Like or Dislike: Thumb up 0 Thumb down 0

  2. Rob in CT says:

    No way! He seemed like such a nice guy!

    Like or Dislike: Thumb up 4 Thumb down 0

  3. Jenos Idanian #13 says:

    The NY GOP has two very easy solutions to this problem:

    1) Dust off the NJ Democrats’ lawsuit from 2002 regarding the Senate race, change the dates, replace “Torricelli” with “Grimm,” “New Jersey” with “New York,” “Senate” with “House,” and other tweaks as necessary and just pick another candidate.

    2) Get Obama to announce that he’s pushing back the deadline for the filing date for candidates.

    Poof. Problem solved.

    Like or Dislike: Thumb up 1 Thumb down 9

  4. Neil Hudelson says:

    Hmm, could someone explain to me how this is just a feint by Obama to distract from the real issues? I’m sure the connection is there, just like the Clive Bundy and Donald Sterling blow up was only an issue because Obama needed to distract us from the real monsters.

    Like or Dislike: Thumb up 3 Thumb down 0

  5. CB says:

    @Jenos Idanian #13:

    Deflecting with the Jersey Democrats? That’s some low hangin’ fruit, man.

    Like or Dislike: Thumb up 5 Thumb down 0

  6. Jenos Idanian #13 says:

    @CB: It’s a handy precedent, and it has the added bonus of leaving Grimm to hang on his own. Which he apparently richly deserves.

    Now if we can just get some of these same investigators to look into Harry Reid’s finances…

    Like or Dislike: Thumb up 0 Thumb down 7

  7. John425 says:

    @CB: Well, there’s always Jersey Democrat Corzine who managed to lose $1.6 billion and they only recovered about 70-80% of it. That still leaves what? $300 million unaccounted for? No jail or trial time for him. Makes one wonder about partisan justice.

    Like or Dislike: Thumb up 0 Thumb down 6

  8. CB says:

    @John425:

    What’s your point? I’m in NJ. Corzine was a schmuck. Democrats here are corrupt incompetents with huge brass balls. I thought this thread was about Grimm committing payroll fraud.

    Like or Dislike: Thumb up 4 Thumb down 0

  9. Jenos Idanian #13 says:

    @CB: Corzine was a schmuck.

    No, Corzine was a crook. On many levels. He should be in prison for violating the very financial laws he himself passed. And that’s not to mention his car crash that also was the result of him ignoring the laws.

    And he was almost in Obama’s cabinet…

    Like or Dislike: Thumb up 1 Thumb down 7

  10. CB says:

    @Jenos Idanian #13:

    No argument from me there.

    I always thought the car crash was ridiculously overplayed compared to the, you know, fraud.

    Like or Dislike: Thumb up 5 Thumb down 0

  11. bill says:

    basically he was indicted for running a business in nyc! it’s like handing out speeding tickets….you know.

    Like or Dislike: Thumb up 0 Thumb down 0

  12. CB says:

    @bill:

    Fraud is fraud, buddy.

    Like or Dislike: Thumb up 2 Thumb down 0

  13. DrDaveT says:

    @bill:

    basically he was indicted for running a business in nyc

    Let’s see, how to put this succinctly…?

    No.

    Like or Dislike: Thumb up 5 Thumb down 0

  14. Jenos Idanian #13 says:

    @CB: I always thought the car crash was ridiculously overplayed compared to the, you know, fraud.

    It was the speeding and no seat belt that were emblematic of Corzine’s attitude — the laws are for other people, not him.

    Like or Dislike: Thumb up 2 Thumb down 0

  15. al-Ameda says:

    @Jenos Idanian #13:

    It was the speeding and no seat belt that were emblematic of Corzine’s attitude — the laws are for other people, not him.

    To my knowledge, Corzine was not driving the vehicle. I could be wrong on this, but …

    Like or Dislike: Thumb up 0 Thumb down 0

  16. Matt Bernius says:

    @Jenos Idanian #13:

    It was the speeding and no seat belt that were emblematic of Corzine’s attitude — the laws are for other people, not him.

    This is emblematic of a broader issue across many elected officials. Sadly, its one that is not restricted to party or ideological persuasion.

    @al-Ameda, frankly it doesn’t matter if it was Corzine driving or not. The fact is that i happened literally under his watch and he was directly involved in the situation.

    Like or Dislike: Thumb up 1 Thumb down 0

  17. bill says:

    @DrDaveT: nyc business relies heavily on “cash” and “2 sets of books”, there’s not much choice in such a heavily taxed/regulated/corrupt environment. who get’s persecuted indicted is very subjective, as we see here.

    Like or Dislike: Thumb up 0 Thumb down 0

  18. DrDaveT says:

    @bill:

    nyc business relies heavily on “cash” and “2 sets of books”, there’s not much choice [...]

    Yes, I understood what you were saying, in all its nuance. It is false.

    Like or Dislike: Thumb up 0 Thumb down 0