Corrupt Congressman Resigns in Disgrace

Originally published on January 4, 2015, at NationofChange.org

After pleading guilty to a felony tax evasion charge and admitting to lying under oath, U.S. Congressman Michael Grimm announced he would resign on January 5, the day before the new Congress convenes. Known for underpaying his employees and threatening reporters, Grimm was elected to a third term this November even though he had been charged with a 20-count indictment by federal authorities for fraud, federal tax evasion, and perjury. Under pressure from House Speaker John Boehner, Grimm finally decided to resign instead of facing an investigation by the House Committee on Ethics.

A former U.S. Marine and undercover FBI agent, Grimm investigated white-collar crime before leaving the Bureau in 2006. Days after leaving the FBI, Grimm invested roughly $1 million of borrowed money in a luxury real estate development in Texas with former FBI Agent Carlos Luquis. At the time, Luquis was under indictment for state racketeering and fraud charges. Convicted for his role in skimming $2 million from Texans’ electric bills, Luquis served 18 months in prison before assisting Grimm on the campaign trail in 2010.

From 2007 through 2009, Grimm owned a health food restaurant in Manhattan called Healthalicious. Overseeing daily operations, Grimm under-reported earnings, hired illegal immigrants, and often paid employees in cash to avoid scrutiny. Concealing over $900,000 in gross receipts, Grimm provided the erroneous information to an accountant who filed false federal and state tax returns for Healthalicious. By under-reporting the restaurant’s payroll, Grimm managed to lower the monthly workers’ compensation premium paid to the New York State Insurance Fund.

On December 1, 2011, two former Healthalicious deliverymen filed a lawsuit against Grimm and the restaurant. They asserted Grimm had paid them less than minimum wage, refused to pay them for working overtime, and usually paid them in cash in order to cheat taxes. In January 2012, the New York State Workers’ Compensation Board ordered Healthalicious to pay $88,000 for not carrying workers’ comp insurance.

While deposed under oath in January 2013, Grimm gave false testimony claiming he had not under-reported Healthalicious’ earnings or paid his employees in cash. During the deposition, Grimm also lied about no longer having access to his work email account.

“As an elected official, Grimm was responsible for deciding how taxpayers’ money should be spent, yet he chose not to pay his fair share of taxes while operating his business,” stated FBI Assistant Director-in-Charge George Venizelos. “Adding insult to injury, while serving as a Member of Congress, Grimm lied under oath in an effort to conceal his criminal activity. The public expects their elected officials at all levels of government to behave honorably, or at a minimum, lawfully. As his guilty plea demonstrates, Grimm put self-interest above public service.”

Elected to the U.S. House of Representatives, Grimm assumed the office on January 3, 2011. Representing New York’s 11th Congressional District including Staten Island and part of Brooklyn, Grimm pleaded guilty to aiding and assisting the preparation of a false tax return less than two months after winning his third term in office. In January 2014, the FBI arrested Grimm’s former girlfriend Diana Durand for exceeding campaign contribution limits by using straw men to donate over $10,000 to Grimm’s 2010 campaign. Durand pleaded guilty in September 2014.

Allegedly advising contributors to illegally exceed campaign contribution limits, Grimm has also been accused of accepting payments from straw men and under-reporting envelopes stuffed with cash donations. Accusing Grimm of blackmailing him for campaign contributions, Rabbi Yoshiyahu Yosef Pinto later testified against Grimm.

On January 28, 2014, Grimm stormed off during an interview when NY1-TV reporter Michael Scotto attempted to ask him about the campaign finance investigation. Unaware or unconcerned that the camera was still recording, Grimm returned moments later on video threatening to throw Scotto off the balcony of the U.S. Capitol building and break him in half. Other reporters and former staff members confirmed Grimm had acted in a similar manner to several journalists on previous occasions.

After defeating former New York City Councilman Domenic Recchia in November, Grimm pleaded guilty to the tax evasion charge while refusing to step down from office. Less than a week after pleading guilty, Grimm met with Speaker of the House John Boehner. Under pressure from Boehner and a possible investigation led by the House Ethics Committee, Grimm changed his mind and announced his resignation effective January 5.

“The events which led to this day did not break my spirit, nor the will of the voters,” Grimm said in a statement issued on December 29, 2014. “However, I do not believe that I can continue to be 100% effective in the next Congress, and therefore, out of respect for the office and the people I so proudly represent, it is time for me to start the next chapter of my life.”

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