Grimm reaper — Ridge Rep. indicted for alleged shady business practices

Grimm: I’ll take on my party over Irene relief funds
Community Newspaper Group / Dan MacLeod

Federal authorities indicted Rep. Michael Grimm (R–Bay Ridge) on April 28, charging the ex-Marine and former law-enforcement agent with 20 counts of tax, insurance, and immigration fraud in connection with the Manhattan restaurant he co-owned prior to holding office.

“Grimm made the choice to go from upholding the law to breaking it,” said United States Attorney Loretta Lynch. “In so doing, he turned his back on every oath he had ever taken.”

Grimm surrendered himself to the Federal Bureau of Investigation Monday, but vowed to prove his innocence — and to win re-election against his Democratic challenger, former Coney Island Councilman Domenic Recchia.

“I am going to fight tooth and nail until I am fully exonerated,” Grimm said at an April 28 press conference.

The Justice Department alleges that Grimm — who held a 45-percent share in the restaurant Healthilicious from 2007 until 2010 — knowingly paid employees in cash to dodge payroll taxes, under-reported the business’s revenue, failed to obtain proper worker’s compensation insurance, hired illegal immigrants, and lied under oath during the investigation.

The indictment even claims that he directed his accountant to continue the policies while he was running his successful upstart effort against then-Rep. Michael McMahon in 2010.

Our sister publication, the New York Post, reported that the accountant who handled the payroll under Grimm’s direction at Healthalicious also handled the books for Grimm’s 2010 congressional campaign.

Grimm is also under scrutiny for his fund-raising tactics during that campaign, but Monday’s indictment was not connected to that investigation.

The late-day announcement on Friday of the impending indictment left both Democrats and Republicans in shock.

“Nobody expected this, nobody saw this coming,” said a source close to Grimm’s staff shortly after the news broke. “We’re all in shock.”

Lawyers for the Staten Island-to-Gravesend congressman — who has long battled allegations that his first campaign in 2010 strong-armed illegal contributions from Israeli nationals — blasted the investigation as a partisan ploy.

“From the beginning, the government has pursued a politically driven vendetta against Congressman Grimm and not an independent search for the truth. Congressman Grimm asserts his innocence of any wrongdoing,” said the pol’s attorney William McGinley in a statement.

Democrats were similarly amazed that the United States Attorney’s office moved against Grimm in the heat of an election year.

“They’re usually sympathetic to the political calendar, and would not do it when it would affect the outcome of an election,” said a leading Democrat in the district, who asked not to be named.

But other experts disagreed.

“I don’t think the U.S. government decides upon when it is going to indict somebody based upon election law calendar in a particular state,” said election lawyer Jerry Goldfeder. “They indict someone when they’re ready to indict.”

Political experts recommended Grimm bow out of the campaign.

“If he gets indicted, Recchia’s chances of victory increase exponentially,” said political strategist and lobbyist Hank Sheinkopf. “It’s a very clear message. Someone is telling Mr. Grimm not to run again, and sometimes when people tell you something, you should listen.”

Meanwhile, Democrats described the scene at Recchia’s campaign headquarters on the Rock on the night of April 25 as jubilant.

“They’re popping champagne bottles over there,” a source said.

The talk of Grimm’s indictment spread on Friday as the Feds unsealed charges against his 2010 campaign donor — and supposed old flame — Diana Durand, who allegedly illegally contributed some $10,000 by having so-called “straw donors” give money, then reimbursed them.

Reach reporter Will Bredderman at [email protected] or by calling (718) 260-4507. Follow him at twitter.com/WillBredderman.