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U.S. Rep. Michael Grimm pleads guilty to federal tax evasion, says he doesn't plan to resign

Rep. Michael Grimm (R-Staten Island) leaves federal court

Rep. Michael Grimm (R-Staten Island) leaves federal court in Brooklyn on Monday, April 29, 2014. Credit: Charles Eckert

Staten Island congressman Michael Grimm pleaded guilty Tuesday to a federal tax fraud charge but said outside court he has no intention of resigning.

Grimm, 44, admitted he underreported the earnings of his Manhattan restaurant, evading taxes on $1 million.

The Republican representative, a former Marine and FBI agent who was easily re-elected to a third term last month, faces up to 3 years in prison and has agreed to pay restitution.

"I'm truly, truly sorry for the mistakes that I made as a small-business owner before I was in office," said Grimm, who read from a statement. "As long as I'm able to serve, I'm going to serve. As of right now, I'm still in the capacity to serve and that's exactly what I plan on doing."

Grimm said he's had "private conversations" with House leaders but didn't address what will happen if he's sent to prison.

A spokesman for House Speaker John Boehner (R-Ohio) said Tuesday, "We don't have any announcements until the speaker discusses the matter with Mr. Grimm."

U.S. District Judge Pamela Chen scheduled sentencing for June 8.

Assistant U.S. Attorney Anthony Capozzolo said Grimm faces a 24- to 30-month prison term under federal guidelines, while defense attorney Jeffrey Neiman estimated the appropriate sentence at between 12 and 18 months.

"Michael Grimm has admitted that while running his business he chose lies and deception over honest dealings," Loretta Lynch, U.S. attorney for the Eastern District of New York, said in a statement.

From 2007 to 2009, prosecutors say, Grimm underreported the gross income of his restaurant, Healthalicious, using a portion of those funds to pay -- under the table -- undocumented immigrants working at the restaurant. He was indicted on 20 counts in April.

"Even though it was a little restaurant, I made some big mistakes -- mistakes that I immensely, immensely regret," Grimm said Tuesday. "I underreported the gross sales, receipts of the restaurant to pay business expenses, including payroll for employees that were off the books."

Lynch said although Grimm only pleaded guilty to a single felony -- aiding the filing of a false tax return -- he "signed a statement admitting to the conduct underlying every charge against him."

Michael Long, chairman of the New York State Conservative Party, said he understands Grimm's instinct to hold onto his seat, but said it's ultimately up to the courts and House leadership. "If he gets prison time, I believe he's going to be forced to resign," Long said.

The Democratic Congressional Campaign Committee said in a statement earlier Tuesday that it was "past time for Michael Grimm to go," calling his continued presence in Congress "a disservice to the people of Staten Island and Brooklyn and a stain on the institution."

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