standard Expert Check-in: Charges are Warranted

Morghan Richardson, Esq., a criminal defense and divorce attorney, analyzes the charges against Congressman Michael Grimm. Despite the likely ubiquity of the activities alleged in the restaurant industry, the claim that the congressman maintained two sets of records was enough for prosecutors to confidently move forward.

Photo Credit: Richardson Legal PLLC

Morghan Richardson, Esq. (Photo Credit: Richardson Legal PLLC)

What is your general impression of Congressman Grimm’s indictment?

The indictment presents charges that appear to be solidly supported by the evidence claimed to be possessed by the United States’ attorney. Any crime that allegedly defrauds the government or IRS is going to involve multiple counts as to how the fraud was carried out, including conspiracy and wire and mail fraud. The prosecution did not hold back on other charges that might have been brought based on the evidence cited. One thing that is important to remember: these include felony charges that can lead to federal prison sentences and extremely harsh financial punishments.

Are you surprised by the nature of the charges? Why weren’t stronger charges included?

What’s perhaps the most interesting is that it appears from the indictment that no evidence was presented pertaining to campaign finance violations, which had been the primary focus of the two-years running investigation by the government. Despite the evidence resulting in somewhat ancillary charges against Ofer Biton and Diana Durand, there seemingly was not enough evidence developed–at the time of this Grand Jury, anyway–to level campaign finance charges against Grimm.

“What is unusual about this particular case is that Grimm was allegedly maintaining a spread-sheet or second cash payroll list.”

The Congressman is being charged with purported criminal activities that, based on our investigation, appear (sadly) to be quite common in the restaurant industry. That, coupled with a years-long investigation of other charges that were never brought, raises the question: was the indictment politically motivated in any way?

Walking the streets of New York City, there are small businesses crammed in every block dealing with these same issues. For the most part, general knowledge prevails that this type of under-reporting and cash payment activity is a wide-spread problem, particularly in industries like the restaurant business, where you have disposable inventory (e.g. food goes bad), low-expectations from unskilled workers, and frankly, lots of cash. Generally, it is extremely difficult – if not impossible – for the government to determine how much cash is changing hands in these types of cases.

What is unusual about this particular case is that Grimm was allegedly maintaining a spread-sheet or second cash payroll list. The testimony provided by Grimm – leading ultimately to the perjury charges – appears to be setting up part of his defense to these allegations: that the second payroll was really a list of checks that the restaurant cashed for employees as a courtesy. And, while Grimm himself has proven to be an unsympathetic public figure, he’ll need to start presenting a more sympathetic portrait of himself to help get traction in this type of defense.

There is a saying: “you can beat the rap, but you can’t beat the ride.”

But the ubiquity of these practices that resulted in Grimm’s indictment is what begs the question: was this politically motivated? His indictment could be political in the sense that these are crimes that are under-prosecuted and wide-spread. At the same time, while investigating the campaign finance-related charges – that may have been completely politically motivated – the investigation turned up the alleged tax and wire fraud. Investigators uncovering felony activity aren’t going to just turn a blind-eye, regardless of their original intentions. And, such investigations also need to be undertaken with care because they are so well publicized, which gives an incentive for the investigation to proceed to charges. Finally, the decision to push forward with these fraud charges does send a general message that no one is above the law, which is important for the government to transmit in dealing with and deterring crimes that are wide-spread.

What about cases where indictments are overzealously pursued? Even if a Defendant may later prove his or her innocence, do prosecutors ever take into account the political, financial, professional and emotional damages the mere indictment process can cause?

There is a saying: “you can beat the rap, but you can’t beat the ride.” You might be able to prove you are innocent of criminal charges, but the damage to your reputation and the emotional and financial toll can be worse than the actual conviction. Public perception is that these types of indictments, particularly against public figures, are only brought when the government has evidence of your guilt. In that way, an indictment like this is extremely damning. The cost of defense counsel in a federal felony situation is going to easily rocket to more than a hundred thousand dollars. Skilled politicians have been able to weather prosecution and salvage their careers, turning the prosecution into an interesting quirk of their character-–just look at Bill Clinton. But whereas Mr. Clinton is extremely likeable and sympathetic, Mr. Grimm is well-known for his aggressive, hostile behavior, marked by his threatening to toss a reporter over a balcony. It will indeed be much more difficult for him.

This article is part of a series. Related articles appear below.


Congressman Michael Grimm (Wikimedia Commons)

Congressman Michael Grimm (Wikimedia Commons)

Brooklyn Brief: The Indictment of Congressman Michael Grimm

A synopsis of the indictment, its ramifications, the political fallout and polarized reaction (largely along party lines).


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Indictment Spotlights Workers in the Shadows

They work for five dollars an hour, with frequent requests to stay late, or perform additional tasks. Their tips are often stolen and their wages can go unpaid. For those in the restaurant industry’s shadow economy—catering, busing, cooking and delivery— the story of the workers who brought a civil suit against Michael Grimm is all too common.



“Please! Everybody and their mother is in this.”

Michael Faillace represented the “Healthalicious” workers in a civil lawsuit. He is colorfully combative and unrepentant in his disgust for most restaurant owners, along with the opposing attorneys they retain. But he actually feels bad for the indicted congressman, who he believes was targeted as a “big cheese,” while abuses remain rampant. He is also fond of the use of expletives.


Cast of Characters

Two Years Chasing a Tight-Lipped Cast of Characters

The initial, unsuccessful investigation of the congressman lasted two years and centered on suspicious funding for his 2010 election campaign. Many of Grimm’s business associates and other contacts were pursued during this time, often booked on separate but related charges, and pressured to testify against him. It appears few of them did.

Stanley Cohen

With the Power to Indict, the Power to Condemn

It’s not just the Congressman’s case that’s suspect: prosecutions across the political and cultural spectrum are dogged by similar accusations.




Expert Check-in: Charges are Warranted

Morghan Richardson, Esq., a criminal defense and divorce attorney, analyzes the charges. Despite the likely ubiquity of the activities alleged in the restaurant industry, the claim that the congressman maintained two sets of records was enough for prosecutors to confidently move forward.

For those presently or formerly in the crosshairs, indictments are seen as a pre-text for a political agenda. Jen Gatien recalls how one case after another was pursued to literally run her father–a prominent owner of several Manhattan nightclubs–out of town.