The list is long: a 20-count indictment has been issued to New York Congressman Michael Grimm, who turned himself in on Monday, pleading not guilty to the charges. Currently Congressman Grimm is out on bail with a $400,000 bond.
Mail fraud, health care fraud, wire fraud, and assisting in the preparation of falsified tax returns are some of the charges brought against the congressman. The former FBI agent and U.S. Marine has served as a congressman since 2011, representing New York’s 11th district. He is being accused in regard to his small business, a fast food restaurant located in Manhattan called Healthalicious.
From 2007 to 2010 Grimm was in charge of day-to-day operations at the restaurant, with responsibilities including reporting payroll. This is where one charge originates, with accusations that Grimm was reporting false numbers and withholding taxes that were due to Federal and State governments. According to the U.S. Attorney’s office Grimm instructed an individual to do the same when he was not present.
Two counts of perjury have also been filed. Grimm was called to explain his actions with Healthalicious under oath in front of a U.S. Attorney, where he allegedly lied to cover up his actions.
Those involved in the indictment include the FBI, Internal Revenue Service-Criminal Investigations Department (IRS-CI), and the U.S. Attorney’s office. The IRS-CI has stated there was fraudulent under-reporting of wages to many workers who are here in the U.S. illegally. The report states a large amount of wages were paid in cash and Grimm did not report these numbers, causing the restaurant’s payroll tax and insurance premiums to be lowered. According to the indictment Grimm has falsely reported and concealed more than $1 million in sales and wages.
Charges say the actions were accomplished by paying half of employee salaries in cash and the other half by check. Other employees received half direct deposit and half cash. Some employees received their entire salary in cash only. Grimm instructed his employees to lie on his behalf to the payroll processing companies so that the would report false tax numbers at the state and federal level.
Congressman Grimm is being accused of having an off-the-books spreadsheet which contained the true numbers of the restaurant, filing false tax returns in 2008, 2009, and 2010.
Also included in the accusations are fraudulent sales reports, with cash sales from April 2007 to August 2010 misreported. He is accused of filing false quarterly tax returns at the state and federal level as gross receipts were covered up.
The discoveries were made when two former employees filed a civil suit against Grimm. The civil suit alleged that Grimm refused to pay the two employees the state minimum wage and overtime. New York’s minimum wage per hour between 2007 to 2010. Minimum wage at the time was$6.75, increasing to $7.25 in 2009.
If Grimm is convicted he could serve up to a 20-year sentence for mail fraud, wire fraud, and a charge of obstruction. Another 10 years of imprisonment may be added if he is also convicted of health care fraud. If convicted on all 20 charges he could face up to 40 and one-half years in prison. Grimm remains in his Staten Island home while out on bail.
By Daniel Gudino