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Dec 23, 2014 2:29 PM

US Rep. Grimm pleads guilty to federal tax evasion

The Associated Press

NEW YORK (AP) U.S. Rep. Michael Grimm admitted Tuesday to federal tax evasion, pleading guilty to charges he had fought as he won re-election in November, but he remained determined to stay in office even with his sentencing now looming.

"As long as I'm able to serve, I'm going to serve," the Staten Island Republican said shortly after he entered a guilty plea to one count of aiding in the filing of a false tax return. "As of right now I'm still in a capacity to serve, and that's exactly what I plan on doing."

Grimm had been set to go to trial in February on charges of evading taxes by hiding more than $1 million in sales and wages while running a Manhattan health-food restaurant.

After his court appearance, Grimm apologized for his actions, saying what he did was wrong.

"I should not have done it and I am truly sorry for it," he said.

During the hearing, Grimm, joined in court by two attorneys, acknowledged sending his accountant underreported receipts and using the leftover money to pay employees off the books and cover other expenses.

Sentencing was scheduled for June 8. Prosecutors said a range of 24 to 30 months in prison would be appropriate, while the defense estimated the appropriate sentence as between 12 and 18 months.

In a statement, Loretta Lynch, the U.S. Attorney for the Eastern District, said, "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."

News of the plea brought pressure from Democrats for Grimm to step down.

The Democratic Congressional Campaign Committee said in a statement earlier Tuesday that it was "past time for Michael Grimm to go," calling his continued presence in Congress "a disservice to the people of Staten Island and Brooklyn and a stain on the institution."

The DCCC and House Minority Leader Nancy Pelosi, D-Calif., called on House Speaker John Boehner, R-Ohio, to ensure Grimm's departure.

Boehner has forced other lawmakers to resign for lesser offenses. He quickly orchestrated the 2011 resignation of Rep. Chris Lee, R-N.Y., a married lawmaker who responded to a personal ad by emailing a shirtless photograph of himself to another woman.

Boehner does not plan to comment on Grimm's situation until the two discuss it, Boehner spokesman Michael Steel said.

Rep. Debbie Wasserman Schultz, D-Fl., head of the Democratic National Committee, said, "Michael Grimm's guilty plea to a felony and admission that he violated the public trust disqualifies him from serving one more minute in office. He should step down immediately. The fact that John Boehner and (Republican National Committee Chairman) Reince Priebus haven't joined in the calls for his resignation is baffling. Their silence speaks volumes."

Grimm told reporters he had spoken to GOP leadership but declined to specify with whom and what those conversations entailed.

Grimm has made similar statements before. Asked in October whether he would resign if found guilty, Grimm responded, "Certainly, if I was not able to serve, then of course I would step aside."

But if Grimm refuses to resign, it would take a rare vote by his fellow lawmakers to expel him from the House. The last member to be expelled was James Traficant, D-Ohio, who was kicked out of Congress in 2002.

A former Marine and FBI agent, Grimm got to Congress by scoring an upset win over first-term Democratic Rep. Michael McMahon in 2010. Grimm won re-election in November, little more than six months after he was indicted.

According to an indictment, the tax fraud began in 2007 after Grimm retired from the FBI and began investing in a small Manhattan restaurant called Healthalicious. The indictment accused him of underreporting more than $1 million in wages and receipts to evade payroll, income and sales taxes, partly by paying immigrant workers, some of them in the country illegally, in cash.

When he was charged, Grimm called the case "a political witch hunt" and declared, "I'm a moral man, a man of integrity."

The case stemmed from an investigation of Grimm's campaign financing. He was never charged with any offense related to his campaign, but a woman romantically linked to him pleaded guilty in September to lining up straw donors for his 2010 run. Grimm has denied knowledge of any fundraising improprieties.

Grimm, 44, made headlines in January after telling a local cable TV news station reporter he wanted to throw the journalist off a balcony in the Capitol for asking about the campaign finance inquiry.

An independent advisory office recommended that the House Ethics Committee investigate the balcony incident. The ethics panel deferred its investigation into Grimm while the Justice Department case was ongoing.

If Grimm doesn't resign, the panel is sure to address the case next year.


Associated Press writers Andrew Taylor in Washington and Tom Hays and Jennifer Peltz in New York contributed to this report.


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