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| Rep. Michael Grimm, facing federal charges, surrenders to FBI | Rep. Michael Grimm, facing federal charges, surrenders to FBI |
| (35 minutes later) | |
| NEW YORK — Rep. Michael G. Grimm (R-N.Y.) surrendered Monday morning to federal authorities in New York as prosecutors unveiled a 20-count indictment connected to a restaurant business he operated before entering Congress in 2011. | NEW YORK — Rep. Michael G. Grimm (R-N.Y.) surrendered Monday morning to federal authorities in New York as prosecutors unveiled a 20-count indictment connected to a restaurant business he operated before entering Congress in 2011. |
| Grimm spent much of the weekend hunkered down, bracing for the unveiling of the federal charges, which were publicly revealed after his surrender. He turned himself in to the FBI at an undisclosed location Monday morning and was taken to Lower Manhattan for processing. | Grimm spent much of the weekend hunkered down, bracing for the unveiling of the federal charges, which were publicly revealed after his surrender. He turned himself in to the FBI at an undisclosed location Monday morning and was taken to Lower Manhattan for processing. |
| The charges stem from his ownership of a Manhattan health-food restaurant that has ties to an Israeli fundraiser who served as a liaison between Grimm and a mystic, celebrity rabbi whose followers donated more than $500,000 to Grimm’s campaign in 2010. | The charges stem from his ownership of a Manhattan health-food restaurant that has ties to an Israeli fundraiser who served as a liaison between Grimm and a mystic, celebrity rabbi whose followers donated more than $500,000 to Grimm’s campaign in 2010. |
| Loretta Lynch, the U.S. attorney for the Eastern District of New York, released the 30-page indictment in a strongly worded attack against the former FBI fraud investigator. “Michael Grimm made the choice from going to upholding the law to breaking the law,” Lynch told reporters. | Loretta Lynch, the U.S. attorney for the Eastern District of New York, released the 30-page indictment in a strongly worded attack against the former FBI fraud investigator. “Michael Grimm made the choice from going to upholding the law to breaking the law,” Lynch told reporters. |
| “As a former FBI agent, Representative Grimm should understand the motto: fidelity, bravery, and integrity,” FBI Assistant Director George Venizelos said in a statement. “Yet he broke our credo at nearly every turn. In this twenty-count indictment, Representative Grimm lived by a new motto: fraud, perjury, and obstruction.” | “As a former FBI agent, Representative Grimm should understand the motto: fidelity, bravery, and integrity,” FBI Assistant Director George Venizelos said in a statement. “Yet he broke our credo at nearly every turn. In this twenty-count indictment, Representative Grimm lived by a new motto: fraud, perjury, and obstruction.” |
| The lawmaker’s attorney, William McGinley, denied that Grimm violated any laws and predicted that he “will be vindicated” when the case is concluded. | The lawmaker’s attorney, William McGinley, denied that Grimm violated any laws and predicted that he “will be vindicated” when the case is concluded. |
| Grimm was released on a $400,00 bail in a 5-minute arraignment in the federal courthouse. | Grimm was released on a $400,00 bail in a 5-minute arraignment in the federal courthouse. |
| The congressman put up his Staten Island home as collateral for posting his bond. He also was ordered by the court to surrender his passport and any firearms, and he cannot travel abroad. | The congressman put up his Staten Island home as collateral for posting his bond. He also was ordered by the court to surrender his passport and any firearms, and he cannot travel abroad. |
| He’s expected to appear back in court May 19 to enter a plea and to determine whether to seek a speedy trial, which is his right, and, if he chose that route, would conclude the case before the November election. | He’s expected to appear back in court May 19 to enter a plea and to determine whether to seek a speedy trial, which is his right, and, if he chose that route, would conclude the case before the November election. |
| The charges outlined in the unsealed indictment allege that Grimm’s restaurant hid from local and federal tax officials more than $1 million in receipts, while also paying workers hundreds of thousands of dollars “off the books” to further avoid paying taxes. The prosecutors said Grimm then lied about the scheme while giving a deposition in 2013 for a lawsuit filed by workers. | The charges outlined in the unsealed indictment allege that Grimm’s restaurant hid from local and federal tax officials more than $1 million in receipts, while also paying workers hundreds of thousands of dollars “off the books” to further avoid paying taxes. The prosecutors said Grimm then lied about the scheme while giving a deposition in 2013 for a lawsuit filed by workers. |
| The indictment included five counts each of mail and wire fraud, three counts related to filing false tax returns, two counts of perjury and one count of obstructing the investigation. Other counts are related to hiring illegal immigrants and declining to provide workers’ compensation insurance. | The indictment included five counts each of mail and wire fraud, three counts related to filing false tax returns, two counts of perjury and one count of obstructing the investigation. Other counts are related to hiring illegal immigrants and declining to provide workers’ compensation insurance. |
| The state has already fined the Upper East Side restaurant, Healthalicious, $88,000 for not providing workers’ compensation. In a lawsuit against the company, workers accused the owners of not paying proper wages and sometimes giving out cash payments to skirt tax and business laws. | The state has already fined the Upper East Side restaurant, Healthalicious, $88,000 for not providing workers’ compensation. In a lawsuit against the company, workers accused the owners of not paying proper wages and sometimes giving out cash payments to skirt tax and business laws. |
| The full indictment was released Monday morning at the U.S. Attorney’s Office for the Eastern District of New York. | The full indictment was released Monday morning at the U.S. Attorney’s Office for the Eastern District of New York. |
| Lynch indicated that the business fraud charges were a smaller piece of a broader investigation into Grimm’s campaign activities, which is still ongoing and could bring further charges. “Obviously there is a larger investigation that is still continuing,” she told reporters. | |
| Venizelos said that once this criminal investigation was completed, he expected FBI officials to begin a formal review of all of Grimm’s casework from his time with the bureau to make sure he handled cases properly. | |
| Ties to Israeli fundraiser | |
| Healthalicious was run by a Grimm company that was connected to another company affiliated with Israeli fundraiser Ofer Biton. Last August, Biton pleaded guilty to filing false documents in 2010 when he sought an investor visa. The plea ended a standoff of several months, during which prosecutors asserted that Biton was not cooperating in their Grimm investigation. | Healthalicious was run by a Grimm company that was connected to another company affiliated with Israeli fundraiser Ofer Biton. Last August, Biton pleaded guilty to filing false documents in 2010 when he sought an investor visa. The plea ended a standoff of several months, during which prosecutors asserted that Biton was not cooperating in their Grimm investigation. |
| Biton often served as a go-between for Grimm, a Roman Catholic, and followers of Yoshiyahu Yosef Pinto, a multimillionaire celebrity rabbi with a strong following in the United States. Pinto is currently in discussions with officials in Israel over a plea deal in a case involving alleged bribery of police leaders there, according to Israeli reports. Pinto has congregations and charitable institutions in the United States and Israel, according to the Associated Press, and reportedly has close relationships with many business leaders, politicians and celebrities, including the Miami Heat’s LeBron James. Forbes Israel recently ranked Pinto as Israel’s seventh-richest rabbi, with a net worth of about $21 million. | |
| The donations from Pinto’s followers proved crucial for Grimm in his 2010 campaign, his first political race, demonstrating to party leaders that he was a viable candidate. He narrowly beat the Democratic incumbent after a campaign that he devoted to his own biography, trumpeting his background as a Marine and an undercover FBI agent as a sign of his ethical standing. | The donations from Pinto’s followers proved crucial for Grimm in his 2010 campaign, his first political race, demonstrating to party leaders that he was a viable candidate. He narrowly beat the Democratic incumbent after a campaign that he devoted to his own biography, trumpeting his background as a Marine and an undercover FBI agent as a sign of his ethical standing. |
| On Friday, prosecutors with the U.S. Attorney’s Office for the Eastern District of New York unsealed an indictment against Diana Durand, a close friend of Grimm’s, alleging that the Houston businesswoman ran a straw-donor scheme that brought in more than $10,000 to Grimm’s 2010 campaign. The charges included lying to investigators in 2012 when they asked about her alleged reimbursement of Grimm donors. | On Friday, prosecutors with the U.S. Attorney’s Office for the Eastern District of New York unsealed an indictment against Diana Durand, a close friend of Grimm’s, alleging that the Houston businesswoman ran a straw-donor scheme that brought in more than $10,000 to Grimm’s 2010 campaign. The charges included lying to investigators in 2012 when they asked about her alleged reimbursement of Grimm donors. |
| Political impact | |
| While Grimm’s attorney has proclaimed the lawmaker’s innocence, the charges and the investigation have provided an opening for his Democratic opponent, former New York City council member Domenic Recchia, who barnstormed the congressional district over the weekend. Recchia bounced around Staten Island and the southern end of Brooklyn, concluding the weekend at a charity event Sunday evening at the Yellow Hook Grille in Brooklyn. Upon his arrival, a waitress rushed up to Recchia and expressed interest in volunteering with his campaign. | |
| Already inclined to support Recchia, Jessica Hauser told him that the arrival of new charges in the Grimm case “makes me extra inclined to volunteer.” | Already inclined to support Recchia, Jessica Hauser told him that the arrival of new charges in the Grimm case “makes me extra inclined to volunteer.” |
| Recchia has tried to keep the campaign focused on kitchen-table issues, but he took indirect swipes at the congressman’s legal problems. “It’s very troubling what has transpired,” he said, suggesting that the criminal case will make it harder for Grimm to serve his constituents. “They want someone who is going to focus on them 100 percent.” | Recchia has tried to keep the campaign focused on kitchen-table issues, but he took indirect swipes at the congressman’s legal problems. “It’s very troubling what has transpired,” he said, suggesting that the criminal case will make it harder for Grimm to serve his constituents. “They want someone who is going to focus on them 100 percent.” |
| Despite Grimm’s legal predicament, Republicans are probably stuck with the embattled congressman on the ballot because the filing deadline for candidates passed two weeks ago. Some New York Republicans are angry about the timing of the charges, fearful that the case could get worse and leave them without a viable candidate in November. Grimm is the only Republican who represents any part of New York City. | Despite Grimm’s legal predicament, Republicans are probably stuck with the embattled congressman on the ballot because the filing deadline for candidates passed two weeks ago. Some New York Republicans are angry about the timing of the charges, fearful that the case could get worse and leave them without a viable candidate in November. Grimm is the only Republican who represents any part of New York City. |
| House Speaker John A. Boehner (R-Ohio) has not spoken to Grimm about the indictment, according to aides. Neither Boehner nor Majority Leader Eric Cantor (R-Va.) has commented about Grimm’s future. The National Republican Congressional Committee has declined to comment on the case. In some previous ethics cases, Boehner has called for lawmakers to resign or removed them from their committee assignments. | House Speaker John A. Boehner (R-Ohio) has not spoken to Grimm about the indictment, according to aides. Neither Boehner nor Majority Leader Eric Cantor (R-Va.) has commented about Grimm’s future. The National Republican Congressional Committee has declined to comment on the case. In some previous ethics cases, Boehner has called for lawmakers to resign or removed them from their committee assignments. |
| Grimm sits on the Financial Services Committee, which oversees Wall Street and the banking industry. | Grimm sits on the Financial Services Committee, which oversees Wall Street and the banking industry. |
| Despite the investigation, Grimm has remained a prolific fundraiser. Through March 31, he brought in more than $1.8 million for his reelection campaign and had more than $1.1 million in his account. However, the case has left a cloud over his political finances. | Despite the investigation, Grimm has remained a prolific fundraiser. Through March 31, he brought in more than $1.8 million for his reelection campaign and had more than $1.1 million in his account. However, the case has left a cloud over his political finances. |
| He paid $50,000 to McGinley’s law firm, Patton Boggs, in the last quarter, and his campaign reports show that he owes an additional $417,000 to the firm. | He paid $50,000 to McGinley’s law firm, Patton Boggs, in the last quarter, and his campaign reports show that he owes an additional $417,000 to the firm. |