NY congressman indicted for fraud, banned from FBI offices

NY congressman indicted for fraud, banned from FBI offices

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Grimm is accused of tax evasion

NEW YORK, May 9, 2014 —  Nearly eight years after he was barred from FBI headquarters, Congressman Michael Grimm (R-NY) was charged last week with fraud, tax evasion, perjury and hiring undocumented workers at a restaurant he co-owned. The Tea Party-supported Republican who represents Staten Island and parts of Brooklyn, was charged with a 20 count federal indictment claiming he shafted the help on wages and failed to pay taxes on over $1 million in restaurant income.

Prior to his election to Congress in 2010, Grimm, a lawyer and former Marine during the 1992 Gulf War, worked as an FBI agent from 1991 until 2006. According to DNAinfo, Grimm resigned from his post in 2006 under internal scrutiny over questionable reimbursement requests he submitted to the agency, as well as allegations that he violated FBI protocol by telling a woman he met during a probe that he worked undercover. Grimm says he did not receive a pension from the agency because he had not yet served for 20-years.

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DNAinfo reports that following Grimm’s resignation in 2006, several New York City FBI offices required their security guards to post Grimm’s photo inside their glass-enclosed stations in the event he showed up. Security guards were under orders to stop Grimm and to immediately notify higher authorities on what further action to take if he was spotted on FBI property.

After Grimm left the FBI, he started Healthilicious, an upper east side health food restaurant through which he is now charged with swindling money. The indictment charges that Grimm failed to report over $1 million in income, cooked the books, and paid restaurant workers in cash to evade paying taxes on the revenue. Grimm is accused of withholding pay from his employees, who he allegedly paid less than minimum wage, and keeping a separate and different set of inaccurate books for his accountants to use as a basis for the business’s tax returns. Grimm opted for cash payouts of either half or all of their earnings so that there was no trail.

According to the Daily Mail, the perjury charges stem from a lawsuit filed by former restaurant employees seeking damages against him for paying them less than minimum wage, and a deposition in January 2013 where he allegedly lied under oath about the matter.

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Grimm’s ex-girlfriend Diana Durand, appears to also be caught in Grimm’s web of alleged fraud. On Monday, Durand pled not guilty to three counts of campaign fraud in federal court. Prosecutors allege that Durand used straw men to accept over $10,000 in illegal donations to Grimm’s congressional campaign.

“My client is not a sophisticated woman,” says Durand’s attorney Stuart Kaplan, who told the NY Daily News that his client did not know she was doing anything wrong at the time she took the donations.

Last week Grimm resigned from his position on the House Financial Services Committee, but thus far has not announced any plans to resign from his seat in Congress. Grimm maintains that he left the FBI with an upstanding record to start a family [that did not pan out] and is innocent of all charges.

“Time and time again I have shown that I don’t abandon my post. I didn’t abandon my post when I was fired on in combat… I’m not abandoning my post now,” said Grimm. “We’re going to fight tooth and nail until I am fully exonerated. I will not abandon my post or the wonderful people who entrusted me to represent them. I have their backs and I know that they have mine.”


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