Michael Grimm’s no good, very bad Monday

Michael Grimm is having a bad week, and it’s only Monday. The Staten Island Congressman has been indicted on twenty criminal charges, including “mail and wire fraud, filing false tax returns, obstruction of justice and perjury,” as reported by Politico. American Bridge has been tracking Grimm’s shady past for quite some time and we have the full background on this growing scandal.

 

BACKGROUND

Under FBI Investigation For Corrupt Fundraising

Relationship With Grimm: Healthalicious

In 2006, Grimm Opened Healthalicious With Bennett Orfaly. According to The New York Times, “In 2006, when Michael G. Grimm retired from a career as an undercover agent with the Federal Bureau of Investigation, a businessman named Bennett Orfaly helped smooth his return to civilian life. Together, they opened a small restaurant on the Upper East Side called Healthalicious that served salads, wraps and smoothies.” [The New York Times, 10/9/12]

Relationship With Gambino Family

Federal Prosecutors Allege That Orfaly Has Ties To The Gambino Family; Prosecutors Revealed This Information At A Bail Hearing For Ofer Biton On Charges Of Immigration Fraud. According to The New York Times, “Now, federal prosecutors are contending that Mr. Orfaly has ties to a member of the Gambino organized crime family, Anthony (Fat Tony) Morelli, who is serving a 20-year prison sentence for racketeering and extortion in an elaborate tax fraud. The prosecutors made the accusation public at a bail hearing last month for a former campaign fund-raiser for Mr. Grimm. The fund-raiser, Ofer Biton, an Israeli, is charged with immigration fraud.” [The New York Times, 10/9/12]

Sources In Law Enforcement Alleged That Morelli Was In Charge Of The Gambino Family’s Porn Investments, Labor Racketeering And Illegal Dumping; Another Source Claimed He Ran The Family’s Florida Rackets. According to The New York Post, “Morelli’s mob assignments included overseeing the family’s investments in pornography, labor racketeering and illegal dumping, law-enforcement sources said. Late Gambino boss John Gotti put him in charge of the family’s Florida rackets, one source said.” [The New York Post, 10/8/12]

Relationship With Biton

Orfaly Posted His Stake In Several Restaurants That He Co-Owned With Biton For Biton’s Bail On A Charge Of Immigration Fraud. According to The New York Post, “Other characters in the bizarre saga include: An Israeli named Ofer Biton, who until recently was jailed on an a charge of immigration fraud. He was released to house arrest on a $1.5 million bond after Orfaly posted his stake in several restaurants co-owned with Biton, according to court papers.” [The New York Post, 10/8/12]

Orfaly Co-Owned Several Restaurants With Biton. According to The New York Post, “He was released to house arrest on a $1.5 million bond after Orfaly posted his stake in several restaurants co-owned with Biton, according to court papers.” [The New York Post, 10/8/12]

  • Orfaly Owned A Chain Of Pita Grill Restaurants In The New York Area. According to Daily News, “‘They have an emotional attachment,’ said Orfaly, who grew up in Bay Ridge, and owns a chain of Pita Grill restaurants in New York. He plans to put the prized chairs on his Jersey City apartment terrace.” [Daily News, 6/2/09]

Ofer Biton

Relationship With Grimm

Biton Served As The Chief Liaison Between Grimm And Pinto. According to the Huffington Post, “The arrest comes amid an ongoing FBI probe of money donated to Grimm’s campaign by followers of an Israeli rabbi, Yoshiyahu Yosef Pinto. Biton was formerly a top aide to Pinto, who also has headquarters and a residence in New York. During Grimm’s 2010 run, Biton acted as the chief liaison between the Staten Island Republican and potential donors in Pinto’s congregation. Some donors have since said that they broke campaign finance law by donating more money than allowed, or by funneling donations from foreigners who aren’t legally allowed to give to U.S. candidates.” [Huffington Post, 8/18/12]

Sources Claimed Grimm Sold His Share Of Healthalicious To Biton Despite Grimm’s Claims He Sold To Orfaly; Biton Owned The Entirety Of The Restaurant As Of October, 2012. According to The New York Post, “But three sources familiar with the ongoing probe, told The Post the purchaser [of Grimm’s share in Healthalicious] was Biton. Either way, Biton now owns Healthalicious outright, sources said – and he is partners with Orfaly in several Manhattan pita restaurants.” [The New York Post, 10/8/12]

  • Grimm’s Attorney Claimed That Grimm Sold His Share Of Healthalicious To Orfaly Before He Ran For Congress. According to The New York Post, “Before his election to Congress in 2010, Grimm and Orfaly had been partners in an Upper East Side eatery, Healthalicious. McGinley says that prior to making his run, Grimm sold his share of that business to Orfaly.” [The New York Post, 10/8/12]

Relationship With Rabbi Pinto

Biton Handled Pinto’s Financial Affairs And Set Up Meetings For The Rabbi. According to The New York Times, “Mr. Biton became a gatekeeper for the rabbi in New York, setting up meetings for him and supervising financial affairs for Shuva Israel, the rabbi’s followers said. Mr. Biton ‘was in charge of all the people working for the rabbi to collect money for donations,’ said Yossi Azour, a Queens developer who is a follower of the rabbi. ‘Ofer,’ he continued, ‘was supposed to deliver it to the bank account.’ Mr. Azour and other followers said the rabbi himself never handled donations.” [The New York Times, 12/21/11]

Pinto Accused Biton Of Embezzling Money. According to the Huffington Post, “Pinto and top people in his organization have also publicly accused Biton of embezzling money from the congregation. He has denied those allegations, and there was no mention of them in the criminal complaint unsealed Friday.” [Huffington Post, 8/18/12]

As Of December 2012, The FBI Was Investigating Whether Biton Embezzled Millions Of Dollars Donated To The Rabbi’s Congregation That Appear To Be Missing. According to The New York Times, “Lawyers involved in the case estimated that millions of dollars donated to Shuva Israel and intended for charitable work appeared to be missing. Federal officials said the F.B.I. was investigating whether Mr. Biton had siphoned off some of the money he was given by donors and other staff members for deposit in the congregation’s accounts.” [The New York Times, 12/21/11]

Immigration Fraud

August, 2012: Grimm Fundraiser And Pinto Aide Ofer Biton Was Arrested On Immigration Fraud Charges. According to the Huffington Post, “An Israeli who helped raise hundreds of thousands of dollars for U.S. Rep. Michael Grimm during his 2010 campaign has been arrested in New York on immigration fraud charges. Businessman Ofer Biton was arraigned Friday at a federal court in Brooklyn on charges that he lied about his finances when he applied two years ago for a special visa available to foreigners who invest $500,000 or more in a U.S. business.” [Huffington Post, 8/18/12]

  • The FBI Alleged That Biton Lied About The Source Of Money He Was Investing To Get A U.S. Visa For Foreign Entrepreneurs. According to the Huffington Post, “An FBI agent accused Biton in the complaint of lying on his immigration application about the source of money he was investing in an attempt to get a U.S. visa for foreign entrepreneurs. The application said the bulk of the money, $400,000, was a personal loan from a family friend. But the FBI said it had witnesses and bank records showing that the money actually came from a ‘coconspirator,’ not named in the complaint, who funneled the money through an accomplice to hide where it came from. By concealing the true source of the money, the FBI said, Biton had violated a part of the visa process requiring honest disclosure of the origins of the investment money.” [Huffington Post, 8/18/12]

Some Of The Rabbi’s Followers Claimed That Biton Gave Them The Impression That Grimm Would Help Biton With His Immigration Issues If Grimm Were Elected. According to The New York Times, “Though Mr. Biton is barred from raising money for federal election campaigns because he is an illegal immigrant, he is said to have raised much of Mr. Grimm’s campaign money for that race from the rabbi’s followers and left the impression with some of them that he expected help with his visa problems in return if Mr. Grimm was elected.” [The New York Times, 8/18/12]

Leverage Against Grimm

Lawyers Who Read The Criminal Complaint Against Biton Claimed That The Charges Were Narrowly Filed In What Might Be An Attempt To Get Biton To Testify Against Other Possible Defendants In A Larger Public Corruption Scheme. According to The New York Times, “Lawyers who read the complaint said that the charges appeared to have been narrowly drawn to preserve Mr. Biton’s ability to become a government witness and cooperate against other possible defendants in a scheme whose tentacles have already touched off public corruption investigations in the halls of Congress and overseas. By focusing strictly on the immigration fraud and not on other areas where Mr. Biton might have criminal exposure, the government may be ensuring that it minimizes the amount of potentially incriminating material it ultimately has to make public about Mr. Biton, since that material could be used by other defendants to attack his credibility or motives, the lawyers explained.” [The New York Times, 8/18/12]

Grimm On Biton: “He Did Not Know Me All That Well, So The Idea That He’s Going To Spend A Month In Jail To Protect A Virtual Stranger Is Absurd.” According to Staten Island Advance, “‘He did not know me all that well, so the idea that he’s going to spend a month in jail to protect a virtual stranger is absurd,’ Grimm said outside of his campaign headquarters in New Dorp Saturday afternoon. ‘So nobody who has six children is going to spend a month in jail, and maybe longer, to protect me. That’s just ridiculous.’” [Staten Island Advance, 9/9/12]

Grimm Owned Restaurant Fined For Workers Compensation Violations And Was Accused of Not Paying Minimum Wage Or Overtime

Workers Compensation

Grimm’s Restaurant Ordered To Pay For Not Carrying Workers Compensation Insurance. According to the New York Times, “After he left the bureau, he opened a restaurant in Manhattan that has been accused in a lawsuit of cheating its workers and fined by the state for failing to carry workers’ compensation. […] The New York State Workers’ Compensation Board last month ordered Healthalicious to pay $88,000 for not carrying workers’ compensation insurance.” [New York Times, 02/16/12]

In January 2012, Grimm’s Restaurant Business Was Fined $88,000 For Not Carrying Workers’ Compensation Insurance. According to The New York Times, “The New York State Workers’ Compensation Board last month ordered Healthalicious to pay $88,000 for not carrying workers’ compensation insurance. And in 2011, two former deliverymen retained a lawyer, Dan Knauth, asserting that the restaurant had paid them less than minimum wage, did not pay for work beyond 40 hours per week and paid cash to evade scrutiny. Mr. Knauth said he contacted Mr. Grimm’s office about the complaints. Shortly afterward, Mr. Grimm filed papers with the state to dissolve his company, Granny Sayz.” [The New York Times, 2/15/12]

Minimum Wage And Overtime

Grimm’s Restaurant Was Accused Of Paying Less Than Minimum Wage And Not Paying Overtime. According to the New York Times “And in 2011, two former deliverymen retained a lawyer, Dan Knauth, asserting that the restaurant had paid them less than minimum wage, did not pay for work beyond 40 hours per week and paid cash to evade scrutiny.” [New York Times, 02/16/12]

Grimm Changed The Restaurant Name To Make Lawsuit Harder. According to the New York Times, “On Dec. 1, the deliverymen sued the restaurant, Mr. Grimm and others. The defendants have not responded in court. But the restaurant has engaged in maneuvers that make it more difficult to sue. The restaurant’s legal name originally contained the word Healthalicious, with a C. Then in 2010, it was changed to Healthalitious NYC (with a T). Finally, right after the lawsuit was filed, the restaurant changed its legal name again, to Healthalicious Upper East Side — with a C.” [New York Times, 02/16/12]

Perez et al v. Granny Sayz LLC et al

Grimm’s Restaurant Businesses, Granny Sayz LLC and Healthalitious NYC Inc., Were Accused Of Wrongfully Denying Them Minimum Wage And Overtime Compensation. On December 1, 2011, Regino and Carlos Perez filed a lawsuit in the United States District Court for the Southern District of New York against Granny Sayz LLC, Healthalitious NYC Inc, Bennett Orfaly and Michael Grimm for denying their employees’ minimum wage and overtime compensation. [Complaint, “Perez et al v. Granny Sayz LLC et al,” United States District Court for the Southern District of New York, Case No. 1:11-cv-08736, Filed 12/1/11]

  • Plaintiff Claimed That Grimm’s Businesses Refused To Pay Them Fair Wages And Overtime. According to the complaint, plaintiffs Perez claimed that Grimm’s businesses, Granny Sayz LLC and Healthalitious NYC Inc., denied them fair wages for full-time employment and any overtime compensation. Plaintiffs Perez stated that they were paid a wage plus tips as a result of the companies’ policy of disguising employees’ actual duties in payroll records to avoid paying plaintiffs at the minimum wage rate. [Complaint, “Perez et al v. Granny Sayz LLC et al,” United States District Court for the Southern District of New York, Case No. 1:11-cv-08736, Filed 12/1/11]
  • Case Settled, Complaint Was Dismissed With Prejudice. On March 12, 2013, the case was settled and the complaint was dismissed with prejudice. Details of the settlement were not included in the case file. [Order, “Perez et al v. Granny Sayz LLC et al,” United States District Court for the Southern District of New York, Case No. 1:11-cv-08736, Filed 3/12/13]