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Michael Grimm Agrees to Pay Back $150K for Tax Fraud Conviction

By Nicholas Rizzi | August 10, 2015 3:14pm
 Former congressman Michael Grimm agreed to pay back nearly $150,000 in restitutions for his tax fraud conviction.
Former congressman Michael Grimm agreed to pay back nearly $150,000 in restitutions for his tax fraud conviction.
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DNAinfo/Nicholas Rizzi

STATEN ISLAND — Former congressman Michael Grimm agreed to pay back nearly $150,000 set by the government as restitution to his tax fraud conviction.

Grimm's lawyer filed paperwork last week in Brooklyn court agreeing to pay the government's suggested $148,880.11 — plus interest and penalties — for underreporting profits and paying workers off the books at Healthalicious, an Upper East Side eatery he co-owned.

The government said in its court filings that Grimm should pay $80,058 for unpaid New York sales tax, $41,720.98 to the IRS for unpaid employment tax, $13,296 back to the IRS for unpaid income tax, $7,086.95 for New York City and state income tax and $6,745.18 for unpaid insurance premiums.

A federal judge sentenced Grimm to 8 months in jail and a year probation for the tax fraud charge in July and a hearing to finalize the restitution for the conviction was set for Aug. 31, which Grimm waived on Wednesday.

Although his lawyers argued in court that Grimm shouldn't have to serve time because he's the primary caretaker for his mother, his sister and former Borough President Guy Molinari, Judge Pamela Chen sentenced him to jail and chided Grimm for belatedly apologizing for his crime.

"Your moral compass, Mr. Grimm, needs some reorientation," Chen said during the sentencing. "He was actively perpetrating fraud on a regular or weekly basis."

During his sentencing hearing, Grimm told Judge Chen he lied on his taxes to keep his restaurant afloat and said his Mariner's training had taught him failure isn't an option.

"I was ashamed to fail," Grimm said. "You're not going to have a restaurant in Manhattan with delivery boys and not pay them off the books. The truth is I should've closed."

Chen berated Grimm multiple times for taking so long to apologize for his crime and downplaying its severity in court.

In December, Grimm pleaded guilty to tax fraud and resigned from his post in Congress the next month. A special election for his seat was won by former District Attorney Dan Donovan.