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Wednesday, April 24, 2024 | Back issues
Courthouse News Service Courthouse News Service

Congressman’s Conspiracy|Claims Flatline in NY

BROOKLYN (CN) - U.S. Rep. Michael Grimm failed to show that the tax-fraud indictment against him is politically motivated and "vindictive," a federal judge said Tuesday, calling the assertion "random speculation."

A grand jury returned the 20-count indictment against Grimm, a Republican congressman from Staten Island, on April 25, relating to his operation of Healthalicious, a Manhattan restaurant he owned between 2007 and 2010. Feds say Grimm, who turned to business and politics after fighting in the Gulf War and working for the FBI, underreported wages for his workers, many of whom were not legal U.S. residents.

They also say he concealed "hundreds of thousands of dollars" in employee wages and gross receipts that the restaurant took in.

Grimm faces a battery of counts from obstruction, tax fraud, wire fraud, mail fraud and hiring illegal workers.

Earlier this month, he filed papers to compel the government's production of documents that he says will prove he's the victim of politically motivated prosecution.

"Just three days after the indictment against Mr. Grimm was announced, one of the lead federal prosecutors who investigated this case publicly resigned and announced his decision to run for a Democratic seat in the New York State Assembly," a motion to compel discovery states.

Media reports show that Todd Kaminsky left his job with the federal prosecutor's office in Brooklyn in May to seek elected office.

"Notably, the indictment was made public after the filing deadline for New York's congressional races had passed," Grimm's motion states.

In denying the motion Tuesday, U.S. District Judge Pamela Chen in Brooklyn called Grimm's claims "unsupported and random speculation."

Grimm, who faces jury selection on Feb. 2, was stone-faced and declined to comment as he walked out of the hearing to a waiting car.

The congressman had claimed that prosecutors went after him because of "personal conflicts" he had with former supervisors as an agent with the FBI's New York office. He said Washington, D.C.'s Public Integrity Section should take over for that office in the investigation.

Chen nixed this argument as well, however, after finding that Grimm's former co-workers could "not influence the investigation in any way."

Through Grimm's team had also pointed to the belief "that this investigation was initiated by a case agent who had a prior employment relationship with a close associate of a rabbi whose followers were the source of the anonymous allegations against Mr. Grimm," Chen said the claim presents "a difficult chain to follow."

Grimm had said that the government stonewalled his requests to discern the involvement by the allegedly biased prosecutor in the investigation, among other issues.

"On its face, the involvement of a former federal prosecutor (who is now running for political office) in the prosecution of a politician from the opposite party, for charges relating to a cash restaurant business owned, outside his jurisdiction, by the politician prior to becoming a Congressman, raises questions regarding the propriety of the investigation," his filing states (parentheses in original).

Alleging that the government does not go after similarly situated restaurateurs, Grimm's attorneys at Marcus Neiman & Rashbaum noted that "the propensity of underreporting cash receipts ... is widely known" as a widespread business practice among "restaurants and other cash businesses."

"That Mr. Grimm appears to be the only individual prosecuted for business practices relating to a Manhattan (Southern District of New York) cash business in the Eastern District of New York over the last 10 years raises serious questions, at the very least," their filing states.

Five years, "countless hours" and $250,000 in tax dollars went into the Grimm probe, his attorneys add.

The feds meanwhile have responded by saying that Grimm "lied under oath" during a January 2013 civil deposition, stemming from a federal labor class action filed against him in 2011 by two of his former restaurant workers in Manhattan.

In that deposition, Grimm "denied that he had paid the restaurant's workers in cash," the government alleges.

The government also says that the selective-prosecution issue is "absurd" and said Grimm's motions amount to nothing more than a "fishing expedition."

Grimm "premises his claim of prosecutorial vindictiveness on the same slender reeds as he does his selective prosecution argument," the government says.

Grimm, who represents Staten Island and the southern tip of Brooklyn, is fighting to keep his seat against Democratic opponent Domenic Recchia Jr on Nov. 4.

Grimm first won the spot in 2010, and was re-elected in 2012 after redistricting.

An attorney and U.S. Marine, Grimm made headlines this January when cameras caught him threatening to throw a television reporter off a balcony.

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