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From
Capital New York:
Rep. Michael Grimm surrendered to federal authorities on Monday morning, shortly before prosecutors at the U.S. attorney's office in Brooklyn unsealed a 20-count indictment related to Grimm's ownership of a health foods store in Manhattan.
Loretta Lynch, the U.S. Attorney for New York's Eastern District, presented the indictment at a press conference in Brooklyn, detailing a tax-evasion scheme that she said was "almost breathtaking in its simplicity."
The indictment accuses Grimm of pocketing more than a million dollars in cash payments at the Upper East Side store called Healthalicious.
"When it came to his restaurant, Michael Grimm never met a tax he didn't lie to evade," Lynch said.
The charges include mail, wire, health care and tax fraud, along with two counts of perjury.
According to the indictment, "Grimm paid a large portion of Healthalicious’ employees’ wages in cash and did not report those cash wages to federal and state authorities, thereby lowering the restaurant’s payroll tax costs."
In 2013, two former Healthalicious employees filed a federal civil lawsuit against Grimm alleging the congressman did not pay them minimum or overtime wages as required by law. During a deposition hearing for the case, Grimm allegedly lied "about several material matters in connection with the lawsuit including whether he paid his employees in cash, and if he had interacted with a payroll processing company," according to prosecutors.
The indictment comes after a two-year investigation that was believed to focus on Grimm's congressional fund-raising.
From the
NY Observer:
Hotel magnate Sant Singh Chatwal, who has lavished campaign cash on everyone from Hillary Clinton to Mayor Bill de Blasio, pleaded guilty today in Brooklyn federal court to campaign finance fraud and witness tampering, U.S. Attorney Loretta Lynch announced.
Mr. Chatwal, 70, who runs a chain of luxury hotels and other companies, allegedly broke federal law by using straw donors–whom he called “conduits”–to make more than $180,000 in illegal campaign contributions to three candidates in an effort to gain access and influence federal regulations, according to a federal complaint.
Prosecutors alleged that, from 2007 to 2011, Mr. Chatwal “used his employees, business associates, and contractors who performed work on his hotels … to solicit campaign contributions on Chatwal’s behalf in support of various candidates for federal office and PACs, collect these contributions, and pay reimbursements for these contributions, in violation of the Election Act.”
A source close to the investigation told the Observer the campaigns belonged to Ms. Clinton, former Connecticut Senator Chris Dodd, and then-Florida Congressman Kendrick Meek, who ran an unsuccessful U.S. Senate campaign in 2010. The source originally identified Majority Leader Harry Reid’s campaign, which has received Chatwal contributions, as one of the related cases, but later reached out to say that was incorrect.
Federal finance records show that a Mr. Chatwal contributed to Ms. Clinton’s 2008 presidential campaign. Multiple individuals with the same last name and hotel employer also gave to the Democratic Congressional Campaign Committee and a Democratic National Committee account, the records show.
Mr. Chatwal additionally appears to be a financial supporter of two federal lawmakers in Queens: Congressman Joe Crowley, the head of the DCCC, and Congressman Gary Ackerman, who recently retired. He also gave extensively to Mr. de Blasio’s mayoral campaign.
There is no allegation, however, that the candidates participated in, or were aware of, Mr. Chatwal’s scheme.
