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New York’s Grimm Is Subject of Second House Ethics Probe

May 23 (Bloomberg) -- The U.S. House Ethics Committee opened an investigation into Representative Michael Grimm, a New York Republican indicted in April on 20 charges of trying to avoid state and federal taxes at his Manhattan restaurant.

The ethics panel said in a statement today that it voted on May 8 to form an investigative subcommittee to look into the allegations, though it will delay its probe at the request of the U.S. Justice Department.

Grimm, 44, who is seeking re-election this year, paid workers at his Manhattan restaurant off the books to skirt state and federal taxes and lied about it, federal prosecutors said.

Grimm was a partner in Granny Sayz LLC, which did business as Healthalicious restaurant on Manhattan’s Upper East Side. He held a 45 percent stake in Granny Sayz, kept two sets of books and concealed the under-the-table payments from payroll-processing companies, hiding more than $1 million in earnings, the government said.

Grimm pleaded not guilty and said the charges amount to a “political witch hunt.”

“Under the House rules, today’s routine announcement by the Committee on Ethics was fully expected,” Grimm’s attorney, William McGinley, said in an e-mailed statement.

It’s the second ethics inquiry into Grimm. In November, the panel said it was deferring its investigation into campaign-finance questions involving the congressman, also at the request of the Justice Department.

Grimm, whose district includes Staten Island and parts of Brooklyn, is the only Republican in the New York City congressional delegation. He was first elected to Congress in 2010.

The case is U.S. v. Grimm, 1:14-cr-00248, U.S. District Court Eastern District of New York. (Brooklyn).

To contact the reporter on this story: Derek Wallbank in Washington at

To contact the editors responsible for this story: Jodi Schneider at Laurie Asseo, Mark McQuillan

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