Brooklyn Congressman Grimm will ‘not abandon post’
Pleads Not Guilty to Federal Charges
An unfazed Brooklyn Congressman pleaded not guilty to a 20-count indictment unsealed Monday morning in Brooklyn’s federal court. U.S. House Representative Michael Grimm faces up to 20 years behind bars if found guilty of tax fraud, perjury and other charges related to his operation of a Manhattan restaurant.
After an investigation that took more than two years by the Federal Bureau of investigation (FBI), the Internal Revenue Service (IRS) and the U.S. Attorney’s Office, a grand jury returned an indictment charging Grimm with defrauding the federal government.
As alleged in the indictment, Grimm started the Manhattan restaurant Healthalicious and, from 2007 through 2010, handled the day-to-day operations including the payment of employees, maintenance of payroll documents and tax reporting. During his run as operations manager, it is alleged that Grimm improperly hired undocumented aliens and paid the majority of his employees in cash in order to underreport the business earnings and pocket the profit.
“Grimm paid a significant portion of Healthalicious’ employees wages in cash and did not report those cash wages to federal and state authorities, thereby lowering the restaurant’s payroll tax costs,” the criminal indictment read. Cash wages are not per se an illegal act for employee payment, however, the non-reporting of cash wages as a means to reduce payroll and other business taxes leads to the violation of federal and state tax laws.