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Rep. Grimm pleads not guilty to federal fraud charges

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CNY/NNY/S. Tier: Rep. Grimm pleads not guilty to federal fraud charges
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NEW YORK CITY -- Congressman Michael Grimm plead not guilty in Brooklyn Federal Court on Monday morning over allegations he defrauded the government more than one million dollars while owning a Manhattan restaurant.

He was released on $400,000 bond and ordered to surrender his passport and firearm.

The Staten Island lawmaker is accused in a scheme to underreport wages for restaurant workers, and then lied about it under oath in an effort to avoid paying taxes.

"Michael Grimm had a choice. And it is the choice faced by every business owner in America. He can run his business legitimately and honestly, or he can succumb to the lure of easy money and try to cheat his way to success. And Michael Grimm made the choice to go from upholding the law, to breaking it," said Loretta Lynch, U.S. attorney.

Investigators say the scheme ran from 2007 to 2010, when Grimm was elected as Congressman. If convicted, federal prosecutors say Grimm faces between five and 10 years on the fraud charges and up to 20 years on the highest charge.

Grimm will continue serving in Congress while he fights the charges. In a statement, Grimm's defense team wrote, "It is important for his constituents to understand that this is not about the law as much as it is about the abuse of power, the distortion of facts, and the targeting of political opponents through persecution while being masked as prosecution."

The lawmaker made headlines in January after an incident involving Time Warner Cable News reporter Michael Scotto. He physically threatened Scotto on camera after he asked a question regarding Grimm's campaign finance issues. ClientIP:, UserAgent: CCBot/2.0 ( Profile: TWCSAMLSP