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Monday, July 15, 2024 | Back issues
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NYC Congressman Cops|to Felony Tax Fraud

BROOKLYN, N.Y. (CN) - With Democrats calling for U.S. Rep. Michael Grimm's resignation after his plea of guilty to felony tax fraud Tuesday, the Republican vowed to hang on to his seat.

"Before I was elected ... I was a business owner of a small restaurant in Manhattan," the Staten Island congressman told reporters after the 30-minute federal court hearing. "Even though it was a little restaurant, I made some big mistakes.

"I thank God for the courage to admit when I'm wrong," Grimm said.

Prosecutors hit Grimm, a former Marine, FBI agent, attorney and restaurant owner, with 20 counts for underreporting millions in earnings and wages, and employing undocumented workers at his Upper East Side eatery, Healthalicious, from 2007 to 2010.

He pleaded guilty only to Count Four, which alleged "aiding and assisting in the preparation of false and fraudulent tax returns."

"While operating a restaurant, we underreported the gross revenues," and used the money to pay workers and expenses, Grimm told the court.

As part of the plea agreement, the government agreed to drop the other 19 charges against Grimm in exchange for a fine of up to $100,000, along with restitution to the Internal Revenue Service and the New York taxation department for underreported earnings and wages between 2007 and 2010.

U.S. District Judge Pamela Chen, who accepted the 44-year-old's plea Tuesday ahead of a trial set for February, will determine those amounts at a July 8 sentencing hearing.

Grimm, 44, faces up to three years in prison with a year of supervised release. He waived his right to appeal if sentenced to less than 33 months.

In previously proclaiming his innocence, Grimm called the prosecution politically motivated and "vindictive."

He changed his tune on Tuesday. "I accept full responsibility," he told reporters after the hearing. "It's difficult to admit when you're wrong, but I'm wrong."

"I'm truly, truly sorry for the mistakes I made," he said.

Despite the government's two-year investigation and the indictment against him, Grimm retained his congressional seat last month by a landslide. Prison time could, however, put his seat in danger.

Congressional rules allow convicts to serve. Grimm on Tuesday vowed to hang on to his seat. He also says he's had discussions with "leadership," but declined to offer any details.

"Some are going to use this to demonize me, they're going to use this for political purposes for the last three years," he said, adding, "I'm ready to get back to work and work as hard as I can."

The Democratic Congressional Campaign Committee on Tuesday urged House Speaker John Boehner, R-Ohio, to orchestrate Grimm's ouster.

"Speaker Boehner and Republican leaders' continued complicity in letting Michael Grim stay in Congress despite his guilt of felony tax evasion is a disservice to the people of Staten Island and Brooklyn and a stain on the institution of the United States House of Representatives," the DCCC said.

Grimm made national headlines last year when he was caught on camera threatening to throw a television reporter over a balcony for asking about the government's investigation.

U.S. Attorney Loretta Lynch, the local federal prosecutor who is poised to become the next U.S. attorney general, said the plea goes to show that "no one is above the law."

"With today's guilty plea, Michael Grimm has admitted that while running his business he chose lies and deception over honest dealings with federal and state authorities as well as his own employees," Lynch said in a statement.

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