Staten Island Rep. Michael Grimm was taken into FBI custody Monday morning. Credit: Alex Wong/Getty Images
Staten Island Rep. Michael Grimm pleaded not guilty on Monday to federal charges that he defrauded the government of taxes on his former health food restaurant.
Prosecutors allege Grimm underreported over $1 million of wages and sales at the Upper East Side restaurant, called Healthalicious. Authorities said some workers at the restaurant, which Grimm ran from 2007 to 2010, were undocumented.
The Republican congressman dismissed the charges as part of a "political witch hunt" designed to "assassinate" his character. He said he has no plans to resign because of the charges.
"We're going to fight tooth and nail until I am fully exonerated," Grimm said shortly after leaving Brooklyn federal court.
Grimm, who represents parts of Staten Island and Brooklyn, was arrested after surrendering to the FBI shortly before 7 a.m. Monday. After he pleaded not guilty, Grimm was released on $400,000 bond and ordered to surrender his passport and firearm.
He was charged with mail, wire and health care fraud, filing false tax returns, perjury, obstruction of an official proceeding and hiring and employing unauthorized aliens in connection with Healthalicious, according to the 20-count indictment unsealed Monday.
"Michael Grimm never met a tax he didn't lie to evade," U.S. Attorney Loretta Lynch said.
Prosecutors allege Grimm hired and paid undocumented Healthalicious employees with cash, falsifying payroll records that underreported gross receipts of the business by $1 million. He was charged with cheating sales, income and payroll taxes while he ran the food shop.
According to the indictment, Grimm also underpaid workers' compensation premiums and lied under oath during a civil suit brought by former employees alleging wage violations.
FBI assistant director-in-charge George Venizelos said Grimm, a former federal agent himself, should have known better.
"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 honored a new motto: fraud, perjury and obstruction," Venizekos said.
The congressman faces 20 years in prison for each mail and wire fraud charge. He is expected in court again next month.
Grimm recently made headlines for threatening to throw a NY1 reporter off of a balcony after the State of the Union address. The congressman apologized to the reporter, who was threatened after asking about an investigation into Grimm's campaign finances.
None of the charges unsealed Monday were related to campaign finance, but Lynch said an investigation is ongoing. Authorities had been probing Grimm's fundraising for the past two years.
Grimm is currently seeking reelection. He was charged shortly after the deadline for Republicans to put a different candidate up for his seat, but Lynch denied the indictment was politically motivated.