New York, NY, United States (4E) – Rep. Michael Grimm (R-N.Y.) was arrested on Monday by FBI agents for tax and mail frauds related to the operation of his restaurant before he was elected in 2011.
Grimm, 44, pleaded not guilty in federal court in Brooklyn to 20 counts of mail fraud, wire fraud, filing false tax returns, hiring unauthorized aliens and perjury. He posted a $400,000 bond secured by his home in Staten Island to get temporary release and surrendered his passport and guns.
The former FBI agent and Marine who turned restaurateur in 2006 vowed to reporters that he will fight until he is exonerated. He labeled the case as a political harassment but said he won’t step down and will still run for re-election in November.
“I’m a moral man, a man of integrity, and I also know I have more service and leadership to provide this country,” Grimm was quoted as saying by NBC New York.
Grimm’s arrest followed the unsealing of an indictment on Monday. The indictment was a result of two years of investigation about the taxes of Healthalicious, the Manhattan restaurant he ran from 2007 to 2010.
U.S. Attorney Loretta Lynch said Grimm under-reported the payroll and earnings of Healthalicious so he could pay lower taxes. Lynch also accused Grimm of employing illegal immigrants and paid their wages in cash to avoid generating paper record.
“Many employees received approximately half of their weekly pay in cash and the other half by check or through direct deposit into a bank account, while others received their entire weekly pay in cash,” said a statement from Lynch, according to CNN.
The workers sued the restaurant for not paying proper wages and sometimes giving out cash payments to skirt tax and business laws. The state fined Healthalicious $88,000 for not compensating workers.