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Congressman indicted for fraud in his restaurant business

Posted Apr 28, 2014 3:27 PM CDT
By Terry Carter

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The long simmering federal investigation of U.S. Rep. Michael Grimm, who represents Staten Island and parts of Brooklyn in Congress, reached a critical stage today with the release of his indictment on multiple fraud charges relating to his business, the New York Times reports.

Grimm pleaded not guilty on Monday to the 20-count indictment, and was released on a $400,000 bond, according to CBS.

"This political witch hunt was designed to do a couple of things, but first and foremost assassinate my character and remove me from office," Grimm said, vowing to remain in office while he fights the charges, reports CBS.

Grimm, a former FBI agent and Marine, was elected to Congress in 2010. Four years prior, after leaving the FBI, Grimm had opened a Manhattan restaurant called Healthalicious. Between 2007 and 2010, the indictment alleges, Grimm paid "a significant portion" of his employees' wages in cash and kept two sets of books to avoid detection. More than $1 million was concealed in this way to evade taxes, prosecutors allege. He is also charged with employing illegal immigrants.

FBI agents at first investigated Grimm's campaign finances, and two of his fundraisers have been charged for illegal campaign donations. One, Israeli businessman Ofer Biton, allegedly helped Grimm elide donation limits, but pleaded guilty to fraud in obtaining his investor visa. Diana Burand, of Houston, is accused of illegally giving more than $10,000 to his campaign.

Midway through the investigation, the Times reports, the focus shifted to his restaurant.

Grimm also was charged with concealment, perjury and obstruction of justice for allegedly lying in a sworn deposition made in January, in a lawsuit brought against him by two former Healthalicious employees who alleged that he did not pay them minimum wage or overtime.

In a prepared statement, FBI assistant director George Venizelos said: "As a former FBI agent, Representative Grimm should understand the motto: fidelity, bravery and integrity. Yet he broke our credo at nearly every turn. In this 20-count indictment, Representative Grimm lived by a new motto: fraud, perjury and obstruction."

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