SOURCE: Congressman Plans To Plead Guilty In Tax Fraud Case

AP

Rep. Michael Grimm (R-New York) is expected to plead guilty on Tuesday to resolve federal tax fraud and other charges, a source familiar with the case told Reuters. 

An indictment filed against Grimm in April included 20 different charges relating to Healthalicious, a Manhattan restaurant he was a part owner of from 2007 until 2010, the year before he was elected to Congress. The indictment detailed what was described as Grimm's "schemes" including hiding over $1 million in earnings to pay lower taxes and knowingly hiring undocumented immigrants. Grimm initially denied any wrongdoing. 

Despite his legal woes, Grimm, a former FBI agent whose New York City district includes Staten Island and parts of Brooklyn, was easily re-elected to a second term in November. 

The New York Daily News first reported on Grimm's guilty plea and said he "is expected to argue that he can continue to hold his House seat despite his guilty plea" if he is able to avoid jail time.

If Grimm does fight to keep his seat, House Republican leaders will need to decide whether to try to force him out. Grimm's re-election campaign was one of the most hotly-contested in the country as he is the only Republican House member within the confines of New York City.  

Court records show a plea hearing has been scheduled for Tuesday afternoon in Brooklyn federal court.

Grimm has also been under investigation by federal authorities since at least 2012 for various allegations involving his campaign fundraising. In January, a woman was charged with funnelling $10,000 into Grimm's war chest illegally through straw donors. Last August, an aide to a high profile Israeli rabbi who raised six figure sums for Grimm from the rabbi's followers pleaded guilty to visa fraud.

In addition to his legal problems, Grimm made headlines in January when he was videotaped threatening to throw a reporter off a balcony. The reporter, NY1's Michael Scotto, had asked Grimm about the probe into his fundraising. 

Grimm's lawyer declined to comment on this story. A spokeswoman for Brooklyn U.S. Attorney Loretta Lynch also declined to comment. Grimm's House office did not respond to a request for comment from Business Insider. 

 

(Reuters reporting by Nate Raymond; Reuters editing by Meredith Mazzilli)