clock menu more-arrow no yes

Rep. Michael Grimm allegedly hid $1 million in restaurant earnings

Rep. Michael Grimm, indicted today
Rep. Michael Grimm, indicted today
Andrew Burton, Getty Images

Representative Michael Grimm, a Republican representing Staten Island and a former FBI agent, was indicted on 20 counts today. Here's what you need to know:

What is Michael Grimm accused of?

Grimm is accused of various financial misdeeds around his management of an Upper East Side restaurant named Healthalicious. Grimm oversaw the restaurant's day-to-day operations from 2007 until his election to Congress in 2010, and held a 45 percent partnership in it.

Screen_shot_2014-04-28_at_1.56.09_pm

The indictment alleges that "Grimm concealed over $1,000,000 in Healthalicious gross receipts alone, as well as hundreds of thousands of dollars of employees' wages" from federal and state authorities, so he could dodge taxes. He paid half or more of employees' wages in cash and reported fraudulent payroll numbers while, the indictment says, he "maintained electronic spreadsheets detailing the true payroll information." He's also accused of lying under oath in a 2013 civil deposition about these matters.

You can read the full indictment here. You can read more details about the restaurant, and its "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," at the Washington Post.

What was Grimm's response?

At a press conference today, Grimm denied the charges and said he wouldn't resign from Congress. "I know I'm a moral man, a man of integrity and I also know that I have a lot more service and leadership to provide this country,'' he said. "And on top of that, I have an election to win."

What does this mean for Grimm's House seat?

Democrats now seem very likely to pick up the seat. It's too late for any other Republican else to win a spot on the primary ballot, and it's also past the deadline for the party to nominate someone else, Politico reports. The district only leans slightly Republican, and Grimm's opponent, former city councilman Dominic Recchia Jr., was already considered one of the Democrats' strongest House challengers this year.

Are there any other controversies about Michael Grimm?

After this year's State of the Union address, NY1 reporter Michael Scotto asked Grimm about various ethics allegations. In response, Grimm threatened to throw him off a balcony. "You're not man enough. I'll break you in half. Like a boy," Grimm said. Watch the video here:

Before that, in 2011, the New Yorker reported disturbing allegations about Grimm's professional behavior as an FBI agent. Grimm brought a woman to a New York night club one night in 1999, but the woman's estranged husband was there, and Grimm got into a heated confrontation with him. Former NYPD officer Gordon Williams gave the magazine his account of what happened:

On July 10, 1999, Williams said, he was working off duty at Caribbean Tropics. Shortly after midnight, Michael Grimm walked in with a woman of Caribbean descent. The woman's estranged husband, who is also of Caribbean descent, was at the club and confronted Grimm. The two men began to argue. Williams escorted Grimm away. Williams recalled, "He said to me, ‘Thanks a lot man, he don't know who he's fucking with.' Then he said something frightening. ‘I'll fuckin' make him disappear where nobody will find him.' " (Grimm calls this allegation "insane.") After that, Williams said, Grimm and the woman left, as did the husband.

According to Williams, somebody was shouting, "He's got a gun!" Following a crowd into the club's garage, Williams discovered that Grimm and the husband had returned, and Grimm was holding a weapon. Grimm was "carrying on like a madman," Williams said. "He's screaming, ‘I'm gonna fuckin' kill him.' So I said to him, ‘Who are you?' He put the gun back in his waist and said, ‘I'm a fucking F.B.I. agent, ain't nobody gonna threaten me.' " (Grimm said he only moved his gun from an ankle holster to his waistband.) The bouncer at the front door told Williams that, when he patted Grimm down and found his gun, Grimm had showed his F.B.I. identification. The bouncer then let him pass through the club's metal detector.

Grimm left the club, but at 4 a.m., just before the club closed, he returned again, according to Williams, this time with another F.B.I. agent and a group of N.Y.P.D. officers. Grimm had told the police that he had been assaulted by the estranged husband and his friends. Williams said that Grimm took command of the scene, and refused to let the remaining patrons and employees leave. "Everybody get up against the fucking wall," Williams recalled him saying. "The F.B.I. is in control." Then Grimm, who apparently wanted to find the man with whom he'd had the original altercation, said something that Williams said he'll never forget: "All the white people get out of here."

... No one was arrested, but later that morning Williams was informed that he was being investigated for "interfering with an F.B.I. investigation." Grimm had told the N.Y.P.D. that Williams refused to help him. After Williams provided his account, the D.A.'s office declined to press charges. But Williams was suspended for moonlighting without department approval. Grimm "should have been arrested," Williams told me. "People that night were petrified."

Williams later sued Grimm for slander. The New Yorker article also criticizes Grimm's handling of a dubious confidential informant.

Was Michael Grimm's restaurant any good?

Reviews were mixed. John L's 2007 review calls it "a truly great find in NYC," and praises the Chicken Milanese and the Turkey Milanese. But Matt E complained the following year, "I can't get any damn consistency at this place … Where the hell are they getting this cold mac and cheese?" And according to a review by Sharon H, the restaurant was closed down for several days by the Department of Health (though that was in 2011, shortly after Grimm was elected to Congress).

Sign up for the newsletter Sign up for The Weeds

Get our essential policy newsletter delivered Fridays.