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Rep. Michael Grimm Decries Fraud Charges as 'Political Witch Hunt'

By  Nicole Bode Nicholas Rizzi Colby Hamilton and Lindsay Armstrong | April 28, 2014 12:21pm | Updated on April 28, 2014 2:55pm

 Rep. Grimm allegedly hid more than $1 million in revenue at his Manhattan restaurant from the IRS.
Rep. Grimm Indicted on Fraud Charges
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DOWNTOWN BROOKLYN — A Staten Island congressman who once threatened to throw a reporter off a balcony for asking him about being the subject of a federal investigation was indicted on fraud charges Monday after feds said he hid more than $1 million in profits at his Upper East Side restaurant from the IRS.

Rep. Michael Grimm, 44, who represents Staten Island and parts of Brooklyn, underreported his profits on his federal tax returns in connection to his Upper East Side restaurant, Healthalicious, between June 2007 and August 2010, according to the U.S. Attorney's Office, which announced the charges on Monday.

During that time, Grimm also hired undocumented workers to staff his restaurant, before stepping down from his role as head of the restaurant and coaching his replacements on how to continue the scam, prosecutors said.

Grimm, who turned himself in to authorities on Monday, pleaded not guilty to the charges and was released on $400,000 bond after his arraignment in Federal District Court. He put up his Staten Island home as collateral.

Addressing the media outside the courthouse Monday afternoon, Grimm accused prosecutors of going on a "political witch hunt" against him, and vehemently vowed he would not step down from his position, despite being charged with 20 counts of crimes including mail fraud, wire fraud, filing a false federal tax return, conspiracy to defraud the U.S. government and impeding the IRS, among others.

"Time and time again I have shown that I don't abandon my post. I didn't abandon my post when I was fired on in combat... I'm not abandoning my post now," said Grimm, who served in the Marines and as a Special Agent in the FBI, "We're going to fight tooth and nail until I am fully exonerated. I will not abandon my post or the wonderful people who entrusted me to represent them. I have their backs and I know that they have mine."

Grimm declined to discuss the charges specifically, except to answer a reporter who asked him "are you a crook?" with a definitive "no."

The charges were the result of a two-year investigation by federal investigators, who began poring over Grimm's campaign finances, only to find that he had been cooking the books at his restaurant, officials said.

Loretta Lynch, the U.S. Attorney for the Eastern District who announced the charges before Grimm's arraignment, denied that there were political motivations for the indictment. She said that his background as a law enforcement investigating fraud made the case "sadder."

"It's never a happy day when you prosecute a former law enforcement agent," Lynch said.

She said that even with Grimm's knowledge of financial fraud, she called the scheme at the restaurant "relatively simple."

Grimm is no longer affiliated with the restaurant, according to investigators. He could face up to 20 years in prison if convicted, officials said.

Workers at the restaurant did not want to comment for this story.

“As a former FBI agent, Representative Grimm should understand the motto: fidelity, bravery, and integrity.  Yet he broke our credo at nearly every turn," FBI Assistant Director George Venizelos said in a statement. "Representative Grimm lived by a new motto: fraud, perjury, and obstruction."

Speaking at an unrelated press conference, Mayor Bill de Blasio called the case "sad" but not unexpected.

"I wish I could say it was a surprise," he said. "I think it’s something that’s been anticipated for a long time."

He added that he continues to support Dominick Recchia Jr., who will run against Grimm for the seat, and said he believes Recchia will be the next congressman.