DAS:JDG/NR
F. #2014R00763
By ECF
The Honorable Pamela K. Chen
United States District Judge
United States District Court
Eastern District of New York
225 Cadman Plaza East
Brooklyn, New York 11201
Re:
Background
A.
On April 28, 2014, a twenty-count Indictment was unsealed that charged the
defendant with a series of crimes stemming from his ownership and operation of Granny
Sayz LLC d/b/a Healthalicious (Healthalicious), a restaurant located in New York, New
York. While operating the restaurant, the defendant engaged in schemes to under-report the
true amount of the restaurants earnings and the wages paid to its workers, thereby
fraudulently lowering the federal and state taxes and the amount of workers compensation
insurance premiums the restaurant owed and paid. Specifically, Grimm fraudulently
On December 23, 2014, Grimm pleaded guilty to Count Four of the Indictment
pursuant to a plea agreement with the government dated December 22, 2014 (the Plea
Agreement). (PSR 1). That count charged the defendant with aiding and assisting the
preparation of a false and fraudulent tax return filed with the IRS, specifically the United
States Return of Partnership Income Form 1065 (Form 1065) for Healthalicious. In
particular, Count Four alleged that the defendant willfully aided and assisted in the
preparation of Healthalicious 2009 Form 1065 which substantially under-reported the
restaurants gross receipts as well as the salaries and wages paid to the restaurants
employees for that tax year. (Id.).
As part of the Plea Agreement, Grimm stipulated and agreed to a Factual Basis
for Guilty Plea, a stipulation of facts executed by the defendant on December 22, 2015 and
incorporated in the Plea Agreement by reference (the Stipulation of Facts or Stip.). The
Stipulation of Facts is attached to this letter as Exhibit A. In the Stipulation of Facts, the
defendant admitted all of the conduct underlying the charges in the Indictment. Among other
admissions, the defendant stipulated that he:
Oversaw the day-to-day operations of Healthalicious while a member in the
restaurant from 2007 through 2009 (Stip. 1);
Concealed over $900,000 in Healthalicious gross receipts from the accountant
who prepared and filed the restaurants tax returns, who then used the false
information the defendant provided to prepare and file false federal and state
tax returns (Stip. 3);
Failed to report the off the books cash wages he was paying to
Healthalicious workers, which resulted in the restaurant paying lower federal
and state payroll taxes. The defendant caused the payroll processing
companies to report to the IRS and the New York State Tax Department less
than half of the wages Healthalicious actually paid its employees (Stip. 4);
Caused false personal federal and New York State income tax returns to be
filed with the IRS and the New York State Tax Department on his behalf
(Stip. 5);
Under-reported Healthalicious payroll to NYSIF, lowering the monthly
workers compensation premium the restaurant paid to NYSIF (Stip. 6);
Caused numerous false documents to be filed with federal and state tax
authorities between 2007 and 2010, including: (1) Form 941 Employers
Argument
For the reasons that follow, the Court should sentence the defendant to a term
of incarceration within the advisory Sentencing Guidelines range of 24 to 30 months.
A.
Legal Standard
For the reasons set forth below, the government respectfully submits that the
Court should determine that the Guidelines range of imprisonment applicable to the
defendant is 24 to 30 months, based upon an adjusted offense level of 17. (See PSR 65
(determining that the defendant falls within Criminal History Category I)).
The defendant has stipulated that under U.S.S.G. 2T1.4, 2T4.1 and 1B1.3,
his appropriate base offense level is 16, reflecting a tax loss of more than $80,000 and less
than $200,000. (See Plea Agreement, dated December 23, 2014 (the Plea Agreement) 2;
Stip. 8). The Probation Department reached the same conclusion with respect to the
applicable tax loss. (PSR 18).
2.
Section 3B1.1(a) calls for a four-level increase in offense level where the
defendant was an organizer or leader of a criminal activity that involved five or more
participants or was otherwise extensive, and Section 3B1.1(b) calls for a three-level increase
in such cases where the defendant was a manager or supervisor (but not an organizer or
leader). Section 3B1.1(c) requires a two-level increase in cases where the defendant was an
organizer, leader, manager or supervisor in any criminal activity other than described in
[subsections] (a) or (b).
It is noteworthy that these emails show that the defendant offered the Manager
a 10% ownership interest in Healthalicious in January 2010, in light of the fact that, in the
defendants interview with the Probation Department, he stated that he sold his share in the
restaurant for $75,000 in 2009. (See PSR 55). Moreover, at the January 2013 deposition in
the Civil Action, the defendant testified under oath that he had sold his ownership interest in
the restaurant in April 2009. Therefore, the defendant either offered the Manager an
ownership interest that the defendant no longer owned or he lied about the date of the sale of
his ownership interest during the deposition or during his interview with the Probation
Department.
This contemporaneous email also suggests that the defendants claims to the
Probation Department that he often had pay his employees out of his own pocket and that
he made no profits from the restaurant (PSR 55), are self-serving and unsubstantiated
attempts to minimize his conduct.
Grimms perjury during the deposition was material to both the Civil Action
and to the instant offense. The Civil Action was a collective action under the Fair Labor
Standards Act brought on behalf of the plaintiffs and other similarly situated employees of
the defendants restaurant alleging, among other things, that the defendant did not pay them
the proper minimum and overtime wages. (See Exhibit F (Complaint filed Dec, 1, 2011
(Compl.))). Therefore any emails, such as those later obtained by the government through
the execution of search warrants for the defendants AOL account, which identified other
restaurant workers and their hours and rates of pay (see Exhibit C) would have been material
with respect to identifying other potential class members and corroborating the plaintiffs
claims that workers were not being compensates according to applicable labor laws. The
defendants false statements under oath in the Civil Action regarding the extent to which he
used email in operating his business and what email account he used (he claimed he used a
Yahoo rather than an AOL email account (see Stip. 10)) were therefore designed to
thwart discovery about material issues in the Civil Action.
In addition, the Civil Action plaintiffs specifically alleged that they were paid
in cash during 2010 and later in a combination of cash and check during a period in 2010 and
2011. (See Compl. 44, 58). In his September 27, 2012 Answer in the Civil Action,
attached as Exhibit G, the defendant denied having sufficient knowledge or information to
admit or deny the allegations in these paragraphs, and further denies any knowledge about
the plaintiff Carlos Perez. (Answer 1, 44, 50-63). Had the defendant answered truthfully
during the deposition, i.e., if he admitted that he paid his workers in cash, he would have
been admitting certain of the plaintiffs allegations. Moreover, had the defendant been
truthful, he would have identified a source of discoverable material his AOL email account
For all of the foregoing reasons, the Court should apply a two-level role
enhancement pursuant to U.S.S.G. 3B1.1(c) and a two-level obstruction enhancement
pursuant to U.S.S.G. 3C1.1, resulting in an adjusted offense level of 17 and a Guidelines
sentencing range of incarceration of 24 to 30 months.
C.
For the reasons below, a consideration of the sentencing factors set forth in
Title 18, United States Code, Section 3553(a) supports imposition of a term of incarceration
within the advisory Guidelines range.
1.
Grimm chose lies and deception over honest dealings with authorities and his
employees quarter after quarter, and year after year while he owned and operated
Healthalicious. His fraud, in which he hid over $900,000 in the restaurants gross receipts,
was designed to conceal his income and enrich himself. The defendant admitted that he
hired unauthorized workers whom he paid off the books in cash, took deliberate steps to
obstruct the federal and state governments from collecting taxes he properly owed, cheated
New York State out of workers compensation insurance premiums, caused numerous false
business and personal tax returns to be filed for several years, and that he lied under oath
about his crimes. The defendants fraudulent conduct was not by happenstance or
unexpected opportunity. It was fraud by design. It involved tracking workers hours, for
which workers were paid entirely off the books, versus those paid only partially in cash,
and ensuring that his weekly cash payroll was prepared and distributed. The defendants
schemes required him to take the step of fabricating his restaurants monthly gross receipts in
e-mails to his accountant. Had the defendant simply printed out the sales reports from his
cash register, his fraud would have been exposed.
When called to account for his actions in running Healthalicious, the defendant
lied under oath. He lied to frustrate the Civil Action being pursued by his former employees
and lied in the hope that his extensive fraudulent conduct at the restaurant would escape the
attention of investigators. The defendants offense is serious precisely because it reveals a
pattern and repeated practice of fraud and deception. The defendants criminal conduct
involves years of fraudulent statements and, when confronted with his fraud, his considered
course of action was to cover up his crimes with additional lies. Accordingly, the serious
nature of the defendants offenses weighs in favor of an sentence of incarceration within the
applicable Guidelines range. See 18 U.S.C. 3553(a)(1), (a)(2)(A).
Restitution
Pursuant to the terms of the Plea Agreement, the defendant agreed to pay
restitution to the IRS and the New York State Tax Department in connection with
Healthalicious and his personal federal and state tax liabilities, plus interest and penalties,
to be calculated at the time of sentencing. The defendant also agreed to pay restitution to
NYSIF in connection with the restaurants workers compensation insurance premiums for
the years 2007 to 2010 in an amount to be calculated at the time of sentencing. (Plea
Agreement 6).
The government respectfully requests that the Court order restitution in the
following amounts: (i) $6,700 in unpaid premiums to NYSIF, (ii) $78,211 to the IRS
(consisting of lost personal income tax revenue and lost employment tax revenue) and
(iii) $110,304.90 to the New York State Tax Department (consisting of lost personal income
tax revenue and lost sales tax revenue). In accordance with the Plea Agreement, the
government requests that the Court order the defendant to pay interest and penalties on the
amounts due to those entities.4
Both the IRS and New York State Tax Department have informed the
government that it is their standard procedure to determine interest and penalties on the loss
amounts, in consultation with the defendant and his counsel, subsequent to the imposition of
judgment.
Conclusion
For the foregoing reasons, the government respectfully submits that the Court
should sentence Michael Grimm to a term of incarceration within the applicable advisory
Sentencing Guidelines range of 24 to 30 months.
Respectfully submitted,
KELLY T. CURRIE
Acting United States Attorney
By:
cc:
/s/
James D. Gatta
Nathan Reilly
Assistant U.S. Attorneys
EXHIBIT A
DAS:AMC/JDG/NR
F.#2011R00532
UNITED STATES DISTRICT COURT
-- --EAS'FERNBiffFRIGT0FNEW-Y:0R::&------------------------- ----------------------
----------------~
"Healthalicious/' a restaurant located in New York, New York that operated through a
corporate entity named Granny Sayz, LLC. In that capacity, GRIMM oversaw the day-today operations of the restaurant. Specifically, GRIMM reported the Healthalicious
employees' pay-rates and their hours worked to the payroll processing companies retained to
manage the restaurant's payroll, and he also distributed wages to employees. When GRIMM
was not present at Healthalicious, he delegated those responsibilities to others.
2.
state tax authorities the true amount of money Healthalicious earned and used a portion of
the restaurant's unreported receipts to pay the restaurant's employees' wages "off the books"
2
in cash. Healthalicious, with GRIMM's knowledge, employed individuals who were not
- -lawfully-admitted-for-permanent-residence -and-not-authorized-to-work-in-the-Bnited-States-:- ---3.
.-------
Hcalthalicious earned to both the Internal Revenue Service ("IRS") and the New York State
Department of Taxation and Finance ("the NYS Tax Department"), thereby lowering the
federal and state income taxes owed and paid by Healthalicious partners. GRIMM concealed
over $900,000 in the restaurant's gross receipts from an accountant who prepared and filed
tax returns on behalf of Healthalicious (the "Accountant"). The Accountant used the
information provided by GRIMM to prepare and file false federal and state tax returns for
Healthalicious. These false returns were filed from Brooklyn, New York.
4.
Additionally, MICHAEL GRIMM did not report to the IRS and the
NYS Tax Department the cash or "off the books" wages he paid to Healthalicious workers,
thereby lowering the restaurant's federal 'and state payroll taxes. Some Healthalicious
employees received at least half their wages in cash. Other Healthalicious employees
received all of their wages in cash. GRIMM maintained electronic spreadsheets which
detailed the restaurant's true payroll information, including the cash wages, while concealing
such cash wages from the payroll processing companies retained by Healthalicious. By
under-reporting employee wages and concealing the existence of some employees, GRIMM
-----~caused. --the-paY-t:olLpwcessing.....c..ompanie.sio.......r..e_
p...o.rt..to......the..lR&....anclthe
NYS Iax_D_ep...artmen..t._ _ _ _ _ _ __
less than half of the wages Healthalicious actually paid its employees.
- l
- l
3
5.
- -- --------------perst'JnaHedera1-and-Nework- Stateincometax-returns-tobe-filed-with-the-I-RS-and-the---------- ---- - -- NYS Tax Department on his behalf. These personal tax returns falsely under-reported
Grimm's partnership income from Healthalicious.
6.
the NYS Tax Department, MICHAEL GRI1\1M also under-reported the amount of
Healthalicious payroll to the New York State Insurance Fund (''NYSIF"), lowering the
monthly workers' compensation premium the restaurant paid to NYSIF.
7.
d.
4
f.
- - R:eturns-fi-led-with-the-NS-'Fax-Bepartment.
8.
--------- - -- - -
GRIMM caused federal and New York State tax and NYSIF premium losses of more than
$80,000 and less than $200,000.
9.
conduct described in paragraphs 1 through 8 above, understanding his actions were unlawful
and with the intent to secure an unlawful benefit, specifically, to secure a lower tax burden
for Healthalicious.
10.
in a deposition in connection with a civil lawsuit pending in the United States District Court
for the Southern District of New York. During the deposition, GRIMNI testified that
Healthalicious employees had not been paid in cash. GRIMM also testified that he did not
generally correspond through email regarding the business ofHealthalicious. GRIMM
further testified that, to the extent he used email in connection with Healthalicious, he used a
"Yahoo" account to which he no longer had access. In fact, GRIMM knew at the time of the
deposition that Healthalicious employees had been paid by cash, as detailed above. In
addition, at the time of the deposition, GRIM:M knew that he had sent and received many
------j~fn--a-ils-F~latd-tG-l:I-ealt-h.a1-i.ciGus-ar:i..d-had-accessed...al'.ld-Continued..to-use-an_A_Q_Lemail_ _ _ _ _ _ _ _ __
account which he did not identify in the deposition and which contained many emails related
to Healthalicious.
- I
5
11.
--- ------reasonabledoubt:----'Fhefacts--detai-led-above-serve-only-as-a-summary-of---t he -evidence-were- ---- -------- -this case to proceed to trial and are not intended to be an exhaustive account of all the
. ~~----
,__ - - --
- --- ----- I
Dated:
~rnv-
'HAEL GRIMM
Defendant
.j(..Wjf.J~~f1'--
- . Neiman, Esq.
L. Rashbaum, Esq.
Stuart N. Kaplan, Esq.
Joseph G. Sconzo, Esq.
Counsel to Defendant
EXHIBIT B
http://mail.aol.com/38366- I l l/aol-6/en-us/mail/PrintMessage.aspx
To
Subject: Re: Mailer
Date: Mon, Jan 4, 2010 1:27 pm
Excellent!
Give me the info on who and where I send a check for the mailer & I will send it out today.
I will draft a document adding you officially as 10% partner in Granny Sayz lie.
As of Jan 1, whatever money I take out of Healthalicious, you will get 10% .. . I will dis~erson.
I am very proud and fortunate to have you as a partner and as a friend, so thank you Michael
Sent from my Verizon Wireless BlackBerry
From:
Date: Mon, 04 Jan 2010 13:19:57 -0500
To:
?Yaol.com>
Subject: Mailer
~~--~~--
Michael ,
..
--------- - - - -- - - -- - ----------------Hope everything is well, once again I wanted to Thank you for your generosity on letting me be part of your
business and promise you that I will do my best to support and help you run a successful restaurant.
I am working on the menu mailer and I wanted to ask you when do you want the coupons to expire? also how
soon do you want the 10 000 menus in the mail?
- - -----GaR-we-- give-some-$$$+-toward-s-the-ma-i-linJ.
--- - - - --
The electric conection in the basement has been alreday re directed to our meter.
Let me know if there is anything else that i can help you with
Regards,
---
I of I
EXHIBIT C
- -~_j
-"'"~----
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From :
To :
Cc:
Bee:
Subject:
Date:
Attachments:
Thanks!
Healthalcious payroll
Tue Mar 23 2010 17:36:50 EDT
Payroll 3-14 - 3-20-201 O.xls
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-=.::,..._,,.
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-- _,... -..-:_.
WORK SCHEDULE
TOTAL
HRS
Serqio
fA.leiandro
3/14/10- 3/20/10
RATE
CHECK
salarv
$800.00
$800.00
$400.00
$400.00
salarv
$650.00
$.,
$300.00
Miquel
36.0
$9.00
$324.00
$324.00
$0.00
$324.00
Reqino
58 .5
$4.60
$269.10
$269.10
$0.00
$269.10
Jesus
16.5
$4.60
$151.80
$75.90
$75.90
16.5
$4.60
$75.90
$75.90
Luis
50.0
$4.60
$230.00
$1 .
$_30.00
Uose Luis
0.0
$4.60
$0.00
Ricardo
56 .5
$4.60
$259.90
Elisio
24,5
$4.60
25.5
$4.60
Karla
42 .0
$11.00 $462.00
Roneld
18.0
$9.50
171
19.0
$9.50
$180.50
Ivan
Lina
Riao
Mike
$0.00
$259.90
$259.90
$11 .
$117.30
0.0
$8.00
. $0.00
34 .5
$8.00
$276.00
0.0
$15.00
$0.00
16.0
$8.00
$128.00
16.0
$8.00
$128.00
$4.60
$0.00
Huao
$0.00
$462.00
$0.00
$462.00
$351.50
$171.00
$180.50
$276.00
$0.00
$276.00
$0.00
$256.00
$0.00
$128.00
$0.00
$128.00
$0.00
' -~"
$0.00
$0.00
$0.00
0.0
$0.00
$0.00
$3 022.70
$3,022 .70
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From :
To:
Cc:
Bee:
Subject:
Date:
Attachments:
healthalicious
Tue Apr 06 2010 12:58:09 EDT
Payroll 3-28 - 4-03-2010.xls
_:
~- ....
__-~ _[ J. __ -Case 1:14-cr-00248-PKC-RML Document 94-3 Filed 06/19/15 Page 5 of 17 PageID #: 541
=-"'
~ . . ~-.""""~-
WORK SCHEDULE
TOTAL
HRS
Seraio
3/28/10- 4/03/10
----
"...,,,c; TO PAY
\IET PAY
:;HECK
salarv
$800.00
$800.00
$400.00
$400.00
salarv
$650.00
$650.00
$350.00
$300.00
$387.00
--
~lejandro
Miauel
43.0
$9.00
$387.00
$387.00
$0.00
Regino
60.0
$4.60
$276.00
$276.00
$0.00
Uesus
17.0
$4.60
$78.20
$156.40
$78.20
$78.20
17.0
$4.60
$78.20
Luis
51 .5
$4.60
$236.90
$_36.90
$0.00
$236.90
Uose Luis
0.0
$4.60
$0.00
Ricardo
40.5
$4.60
Elisio
24.5
'
$276.00
$0.00
$0.00
$186.30
$186.30
$186.30
$4.60
$112.70
$ 2 .40
24.5
$4.60
$112.70
Karla
41 .5
$11.00 $456.50
$456.50
$0.00
$456.50
Roneld
18.0
$9.50
171
$342.00
$171 .00
$171.00
18.0
$9.50
$171 .00
0.0
$8.00
$0 .00
$260.00
$0.00
$260.00
32.5
$8.00
$260.00
Lina
0.0
$15.00
$0.00
Riao
15.0
$8.00
$120.00
15-1)
<J:R nn
$124.00
$4.60
$0.00
Ivan
Huao
$112.7
$0.00
$244.00
$11-.7
$0.00
$120.00
$0.00
$124.00
$0.00
rl.
Mike
.-
$0.00
$0.00
$0.00
$4 220.50
$4 ,220.50
$1 231 .90
$2 988.60
$2 ,988.60
$4 ,220.50
0.0
$0.00
$0.00
I---~
From :
To:
Cc:
Bee:
Subject:
Da.te:
Attachments:
payroll - healthalicious
Tue Apr 13 2010 16:40:26 EDT
Payroll 4-04 - 4-10-2010.xls
Sr. I attached the payroll but Karla already took hers out of the register because she had an
emergency and needed cash so do not pay her and get her to sign her check back to us.
She put the envelopes and pay checks in a bag for you.
THANKS and sorry I wasn't there to do it for you.
Michael
I .
:...:....:.__
:_:___
--
--~-=:-..,._-.;--
.1
WORK SCHEDULE
4/04/10- 4/10/10
TOTAL
HRS
U.T! fOPAY
NET PAY
:HECK
Sergio
salarv
$800.00
$800.00
$400.00
$400.00
Alejandro
salary
$650.00
$650.00
$350.00
$300.00
\/liquel
45.0
$9.00
$405.00
$405.00
$0.00
$405.00
Reqino
57 .5
$4.60
$264.50
$264.50
$0.00
$264.50
Jesus
16.0
$4.60
$73 .60
$149.50
$73.60
$75.90
16.5
$4.60
$75.90
49 .0
$4 .60
$225.40
$225.40
$0.00
$225.40
Jose Luis
0.0
$4.60
$0.00
Ricardo
55 .5
$4.60
Elisio
~UiS
$0.00
$0.00
$255.30
$255.30
$255.30
24.0
24.0
$4.60 . $110.40
$4.60 $110.40
$220.80
$110.40
$110.40
Karla
42 .0
$462.00
$0.00
$462.00
Roneld
17.0
$327.75
$161.50
$166.25
17.5
$9.50
$9.50
$166.25
0.0
$8.00
$0.00
$276.00
$0.00
$276.00
34.5
$8.00 $276.00
$15.00 $0.00
Ivan
Lina
0.0
Riao
15.0
. 14.5
Huao
161 .5
$8.00
$120.00
$8.00
$116.00
$4.60
$0.00
$0.00
$0.00
$236.00
$120.00
$116.00
$0.00
$0.00
3I
Mike
$0.00
$0.00
$0.00
$4 272.25
$4,272 .25
$1 215.50
$3 056.75
$3,056.75
$4,272.25
0.0
$0.00
$0.00
I-;:_
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From:
To:
Cc:
Bee:
Subject:
Date:
Attachments:
healthalicious
Wed Apr 21 2010 11:05:11 EDT
Payroll 4-11 - 4-17-2010.xls
I
:. I
Case 1:14-cr-00248-PKC-RML Document 94-3 Filed 06/19/15 Page 9 of 17 PageID #: 545
I-
WORK SCHEDULE
TOTAL
HRS
Sergio
~leiandro
RATE
CHECK
salary
$800.00
$800.00
$400.00
$400.00
salarv
$650.00
$650.00
$350.00
$300.00
Miouel
49 .0
$9.00
$441.00
$441.00
$0.00
$441.00
Reoino
61 .0
$4.60
$280.60
$280.60
$0.00
$280.60
Uesus
18.0
$4.60
$82.80
$165.60
$82.80
$82.80
18.0
$4.60
$82.80
Luis
51.0
$4.60
$234.60
$234.60
$0.00
$234.60
Uose Luis
0.0
$4.60
$0.00
Ricardo
53 .0
$4.60
Elisio
24.0
24.0
Karla
42 .0
Rone Id
18.5
17.5
0.0
van
$0.00
$0.00
$243.80
$243.80
$243.80
$4.60
$110.40
$220.80
$110.40
$110.40
$4.60
$110.40
$462.00
$0.00
$462.00
$9.50
175.75
$342.00
$175.75
$166.25
$9.50
$166.25
$8.00
$0.00
$272.00
$0.00
$272.00
34.0
$8.00
$272.00
Lina
0.0
$15.00
$0.00
Rigo
15.5
$8 .00
$124.00
14.5
$8.00
$116.00
$4.60
$0.00
Hugo
$0.00
$240.00
$0.00
$124.00
$0.00
$116.00
$0.00
I_~
Mike
ILL.
$0.00
$0.00
$0.00
$4 352.40
$4,352.40
$1 242.95
$3 109.45
$3,109.45
$4,352.40
0.0
$0 .00
$0.00
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From :
To:
Cc:
Bee:
Subject:
Date:
Attachments:
healthalicious
Tue Apr 27 2010 12: 16:23 EDT
Payroll 4-18 - 4-24-201 O.xls
Sr.
Karla will send the checks and envelopes to Pita Grill.
Thanks!
Did we order the waffle maker?
MgG
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WORK SCHEDULE
TOTAL
HRS
ISeraio
4/18/10- 4/24/10
8HECK
salarv
$800.00
$800.00
$400.00
$400.00
salarv
$650.00
$650.00
Alejandro
~-
.0
f---"'-"
Miguel
55.0
$9.00
$495.00
$495.00
$0.00
$495.00
Regino
60.0
$4.60
$276.00
$276.00
$0.00
$276.00
Jesus
16.5
$75.90
$151.80
$75.90
$75.90
16.5
$4.60
$4.60
47.5
$4.60
$218.50
$... 1 ....
$ .
~uis
$75.90
$... 1 .
I
Jose Luis
0.0
$4.60
$0.00
Ricardo
52 .5
$4 .60
$241.50
$241.50
Elisio
23.0
$4.60
$105.80
$213.90
$105.80
$108.10
23.5
$4.60
$108.10
Karla
40.5
$445.50
$0.00
$445.50
Rone Id
17.0
$9.50
161 .5
$337.25
$161.50
$175.75
18.5
$9.50
$175.75
0.0
$8.00
$0 .00
$248.00
$0.00
$248.00
31 .0
$8.00
$248.00
Lina
0.0
$15.00
$0.00
~iao
14.0
$8.00 $112.00
<l:R nn _$1?n nn
van
15.0
Huao
\/like
$4.60
$0.00
,-,
$0.00
$0.00
$241.5
$0.00
$232.00
$0.00
$112.00
$0.00
$120.00
$0.00
$0.00
$0.00
$0.00
$4 309.45
$4 ,309.45
$1 205.20
$3 104.25
$3,104.25
$4,309.45
0.0
$0.00
$0.00
- I
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From:
To:
Cc:
Bee:
Subject:
Date:
Attachments:
-I
- I
Case 1:14-cr-00248-PKC-RML Document 94-3 Filed 06/19/15 Page 13 of 17 PageID #: 549
-
:__ ':.:..'.:.
___:.._, _
_;.__
WORK SCHEDULE
TOTAL
HRS
Seraio
---
5/01/10- 5/07/10
~~~~:
CHECK
salarv
$800.00
$800.00
$400.00
$400.00
salary
$650.00
$650.00
$350.00
$300.00
Alejandro
r-
Miguel
30 .0
$9.00
$270.00
$270.00
$0.00
$270.00
Regino
61.5
$4.60
$282.90
$282.90
$0.00
$282.90
Jesus
17.0
$4.60
$78.20
$156.40
$78.20
$78.20
17.0
$4.60
$78.20
.... uis
43 .5
$4.60
$200.10
$200.10
$0.00
$200.10
Jose Luis
0.0
$4.60
$0.00
$v.
Ricardo
63 .0
$4.60
$289.80
$289.80
Elisio
23.5
$4.60
$108.10
$216.20
$108.10
$108.10
$108.10
$0.00
$289.80
23.5
$4.60
Karla
40.5
$11.00 $445.50
$445.50
$0.00
$445.50
Roneld
18.5
$9.50
175.75
$351 .50
$175.75
$175.75
18.5
$9 .50
$175.75
0.0
$8.00
$0.00
$260.00
$0.00
$260.00
32.5
$8 .00
$260.00
.... ina
0.0
$15.00
$0.00
Riao
16.0
t5_,5
$8.00
$128.00
no
$124.00
Ivan
Huao
$R
$4.60
$0 .00
$0.00
$252.00
$0.00
$128.00
$0.00
$124.00
$0.00
1
Mike
$0.00
$0.00
$0.00
$4 174.40
$4,174.40
$1 240.05
$2 934.35
$2 ,934.35
$4,174.40
0.0
$0.00
$0.00
I , __ -. . __ ,_; __ I
.
Case 1:14-cr-00248-PKC-RML Document 94-3 Filed 06/19/15 Page 14 of 17 PageID #: 550
':1
From :
To:
Cc:
Bee:
Subject:
Date:
Attach men ts:
Payroll
Tue Jun 08 2010 19:20:09 EDT
Payroll 5-30 - 6-05-2010.xls
Sr.
I am sorry but I can't make it into the city tonight.I will text you the details
Thanks as always!
Michael
---~---1
1~..,,~..,----
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~---~I
WORK SCHEDULE
TOTAL
HRS
Sergio
.,
KM..PE
$400.00
$400.00
salary
$650.00
23.5
$9.00
$211.50
$418.50
23.0
$9 .00
$4.60
$207.00
$207.00
$266.80
$4.60
$0.00
0.0
$4.60
$0.00
48.0
$4.60
$220.80
$ 20.80
$'.
$4.60
$4.60
$4.60
$96.60
$96.60
$241 .50
$193.20
$96.60
Ricardo
21 .0
21 .0
52 .5
$_4
Elisio
24.0
$4.60
$110.40
$223.10
$110.40
$112.70
24.5
$4.60
$112.70
Karla
65.5
$11.00 $720.50
$720.50
$0.00
$720.50
Roneld
0.0
$9.50
$0.00
$0.00
$0.00
0.0
$9.50
$0.00
0.0
$8.00
$0.00
$260.00
$0.00
$260.00
32 .5
$8.00
19.0
$8.50
$260.00
$161 .50
$327.25
$161 .50
$165.75
19.5
$8 .50
$165.75
15.5
1.S. ()
$8 .00
$124.00
$244.00
$124.00
$120.00
ctQ . ()()
~1-2-0 . nn
$4.60
$0.00
Freddy
~eaino
Uesus
Carlos
Lauro
Velazque~
Ivan
ca lease
Riao
58.0
Hugo
-
Mike
_..._ .
~t;._~~
~HECK
$800.00
Alejandro
5/30/10- 6/05/10
salary
. .,
.0
$0.00
$211.50
$266.80
$0.00
$266.80
$0.00
$0.00
$0.00
$2
.8
$96.60
$_~1.
.v
$0.00
$0.00
$0.00
$0.00
$0.00
$4 772.65
$4,772 .65
$1 242.50
$3116.15
$3,116.15
$4 ,358.65
0.0
$0.00
$0.00
'
..I
From :
To:
Cc:
Bee:
Subject:
Date:
Attach men ts :
Karla has everything ready in a bag and the checks! Thanks as always my friend - say a prayer that
the land lord is willing to bargain.
~-
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.- -- -- - -- -'
--
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WORK SCHEDULE
6/06/10- 6/12/10
TOTAL
HRS
~ATE
:HECK
ISeroio
salarv
$800.00
$800.00
$400.00
$400.00
Aleiandro
salarv
$650.00
$j ~0.0
$350.00
$300.00
25.5
$9.00
$229.50
$454.50
$0.00
$229.50
25.0
$9.00
$225.00
$225.00
62 .5
$4.60
$287.50
$287.50
$0.00
$287.50
$4 .60
$0.00
$0.00
$0.00
$0.00
0.0
$4.60
$0.00
Carlos
48 .0
$4.60
$220.80
$ 20.80
$0.00
$220.80
Lauro Velazque.
$4.60
$4.60
$4 .60
$96.60
$103.50
$241 .50
$200.10
$96.60
Ricardo
21.0
22.5
52 .5
$241.50
Elisio
26 .5
$4.60
$121.90
$243.80
26 .5
$4.60
$121 .90
Karla
65 .0
Rone Id
0.0
$9 .50
0.0
$9.50
$0.00
Freddv
Reaino
Uesus
Ivan
ca lease
Riao
0.0
$8.00
$0.00
31.5
$8.00
$252.00
16.5
$8 .50
$140.25
16.5
$8.50
$140.25
16.0
$8.00
15 _n
<l'O
$128.00
<1:1 ')R nn
Huqo
Mike
nQ_
$4.60
$0.00
II
$1
..
$241.50
$12 .
II
$ 1_ 1.
$715.00
$0.00
$715.00
$0.00
$0.00
$0.00
$252.00
$0.00
$252.00
$280.50
$140.25
$140.25
$256.00
$128.00
$128.00
$0.00
$0.00
$0.00
$0.00
$0.00
$4 826.70
$4,826.70
$1 236.75
$3 139.95
$3 ,139.95
$4 ,376.70
0.0
$0.00
$0.00
..
r-::-
EXHIBITD
:>::--
- I
__
-I
Case 1:14-cr-00248-PKC-RML Document 94-4 Filed 06/19/15 Page 2 of 2 PageID #: 555
\-----~
Re : Update
!-_:.
Sr.
Thank you! I think we may just want to switch from LCK to whomever you are using ... obviously they are having
problems and we need to have our filings done on time. Did you ever find out why our Worker's Comp went up
stating our failure to provide info?
Please get my name off the Health Dept. That is a priority.
Again, thank you and I will send the check to Doug.
Feliz Pasqua
MgG
Sent from my Verizon Wireless BlackBerry
- - --------- - - - -
- - - - - - - -
Sr. Grim
Hope everything is well, I just want a keep you updated:
a) The mailing is ready to go, Doug need $2300.00 in advance of the 4k for the total price of the mailing
b) I am having a meeting with LCK on Wednesday at Healthalicious at 2:30pm if you happen to be free it will be
good if you can join us. All I want to go over is about them pulling out the money automatically which hasn't been
done since they change the bank they were dealing with, also I need to see who is in charge of the proper filling
of payroll taxes since we receive a notice of failure on filling the NYS 45
C) Also I am creating an employee file which once I have it completed I will give it to you and will include:
Employee information, W2 form, 1-9 form, and a copy of their SS
------- - - - - - - - - - - - - - - - - - - -
1 ofl
. 1,.
EXHIBIT E
Bee:
Subject:
Date:
Attachments:
Page 2 of 5
I -
- I
I - ..->
I left the FBI in 2006 and in 2007 I opened the restaurant with 2 partners. 1 partner opened 18
restaurants and had a successful chain in Manhattan that he franchised . I went in thinking that I know
nothing about being in business and nothing about the restaurant business at all. So, I waited for the
partners to step up and listen to the consulting chef and the people that worked for the partner's other
restaurants . Nothing was getting done to my standards and finally I took over everything , even though I
was originally only responsible for the accounting and legal. I learned how to cook, how to take orders
and I worked like a dog to learn every aspect of the business myself and i put new systems in place.
within 3 months of my deciding to take charge, we started to make money. To this day, my partner
uses my systems in his other restaurant. moral of the story is that experts and consultants don't always
know best for what I need to succeed .
So why am I telling you this :
Because my instincts have never been wrong and in the
do them, I was unsuccessful and losttime and money.
Page 3 of 5
i -- -
Page 4 of 5
MgG
Page 5 of 5
~- -
EXHIBIT F
'.:
MICHAEL f AILLACE
11
cw
Plaintiffs,
COMPLAINT
COLLECTIVE ACTION UNDER
29 u.s.c. 216(b)
-againstECF Case
Defendants.
-------------------------------------------------------)(
Plaintiffs Regino Perez and Carlos Perez, individually and on behalf of others similarly
situated (collectively the "Plaintiffs,,), by and through their attorneys, Michael Faillace &
Associates, P.C., upon their knowledge and belief, and as against Defendants Granny Sayz LLC
and Healthalitious NYC Inc. (d/b/a Healthalicious) (each a Corporate Defendant, and
-~-----'~c_ollectiYeh
the "Defendant Co orations"), and Bennett Orfaly and Michael Grimm, (together
Page 2 of 19
located at 1594 2nd Avenue, New York, New York 10028, under the name Healthalicious. 3.
Upon information and belief, Individual Defendants Michael Grimm and Bennett
At all times relevant to this complaint, Plaintiffs worked for Defendants in excess
of forty (40) hours per week, without appropriate compensation for the hours over forty (40) per
week that they worked. Rather, Defendants failed to maintain accurate recordkeeping of their
hours worked, failed to pay Plaintiffs appropriately for any hours worked over forty (40), either
at the straight rate of pay, or for any additional overtime premium. Further, Defendants failed to
pay Plaintiffs the required "spread of hours" pay for any day in which they had to work over ten
~~~~~+(l~O}Ju1urs~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~-
6.
practice of requiring Plaintiffs and other employees to work in excess of forty (40) hours per
-2-
week without paying them the minimum wage and overtime compensation required by federal
and state law and regulations.
7.
payroll, but in actuality their duties included greater or equal time spent in non-delivery, nontipped functions such as maintenance, cleaning, receiving and stocking incoming deliveries, and
kitchen assistance.
8.
9.
However, under both the FLSA and NYLL Defendants were not entitled to take a
tip credit because Plaintiffs' non-tipped duties exceeded 20% of each workday, or 2 hours per
day (whichever was less in each day) (12 N.Y.C.R.R. 146).
10.
Upon infonnation and belief, Defendants employed the policy and practice of
disguising Plaintiffs' actual duties in payroll records to avoid paying Plaintiffs at the minimum
wage rate, and to enable them to pay Plaintiffs at the lower tip-credited rate by designating them
deliverymen instead of non-tipped employees.
11.
Defendants' conduct extended beyond the Plaintiffs to all other similarly situated
employees.
12.
Plaintiffs now bring this action on behalf of themselves, and other similarly
situated individuals, for unpaid minimum wages and overtime wages pursuant to the Fair Labor
Standards Act of 1938, 29 U.S.C. 201 et seq. ("FLSA"), and for violations of the N.Y. Labor
Law 190 et seq. and 650 et seq. (the "NYLL"), and the "spread of hours" and overtime wage
orders of the New York Commissioner of Labor codified at N.Y. COMP. CODES .
REGS. Tit.
12, 137-1.7 (2006) (herein the "Spread of Hours Wage Order"), including applicable liquidated
damages, interest, attorneys' fees, and costs.
- 3-
,_
'-~
13.
Page 4 of 19
themselves, individually, and all other similarly situated employees and former employees of the
Defendants pursuant to 29 U.S.C. 216(b).
This Court has subject matter jurisdiction under 28 U.S.C. 1331 (federal
question) and the FLSA, and supplemental jurisdiction of Plaintiffs' state law claims under 28
U.S.C. 1367(a).
15.
Venue is proper in this District under 28 U.S.C. 139l(b) and (c) because all or a
substantial part of the events or omissions giving rise to the claims occurred in this district.
Upon information and belief, the Defendants maintain their corporate headquarters and offices
within this district. Defendants operate a health food takeout restaurant within this district.
Further, Plaintiffs were employed by Defendants in this district.
THE PARTIES
Plaintiffs
16.
residing in Kings County, New York. Plaintiff Perez was employed by Defendants from
approximately April 2007 until on or about March 25, 2011.
17.
residing in .Kings County, New York. Plaintiff Carlos was employed by.Defendants from
approximately March 2010 until on or about March l 0, 2011.
-4-
Page 5 of 19
Defendants
18.
At all relevant times, Defendants owned, operated, and/or controlled a health food
takeout restaurant located at 1594 2nd Avenue, New York, New York 10028, under the name of
Healthalicious.
19.
Upon information and belief, Granny Sayz LLC, ("Granny Sayz") is a domestic
corporation organized and existing under the laws of the State of New York. Upon infonnation
and belief, it maintains as its principal place of business a health food takeout restaurant located
at 1594 2nd Avenue, New York, New York 10028, under the name of Healthalicious.
20.
domestic corporation organized and existing under the laws of the State of New York. Upon
information and belief, it maintains as its principal place of business a health food takeout
restaurant located at 1594 2nd Avenue, New York, New York 10028, under the name of
Healthalicious.
21.
business in this judicial distric.t during the relevant time period. Defendant Michael Grimm is
sued individually in his capacity as an owner, officer and/or agent of the Defendant
Corporations. Defendant Michael Grimm possesses or possessed operational control over
Defendant Corporations, an ownership interest in Defendant Corporations, or controlled
significant functions of Defendant Corporations. He determined the wages and compensation of
the employees of Defendants, including Plaintiffs, and established the schedules of the
employees, maintained employee records, and had the authority to hire and fire employees.
22.
business in this judicial district during the relevant time period. Defendant Bennett Orfaly is
- 5-
Page 6 of 19
sued individually in his capacity as an owner, officer and/or agent of the Defendant
Corporations. Defendant Bennett Orfaly possesses or possessed operational control over
Defendant Corporations, an ownership interest in Defendant Corporations, or controlled
significant functions of Defendant Corporations. He detennined the wages and compensation of
the employees of Defendants, including Plaintiffs, and established the schedules of the
employees, maintained employee records, and had the authority to hire and fire employees.
FACTUAL ALLEGATIONS
Defendants operate a health food takeout restaurant located in the Upper East Side
Defendants are associated and joint employers, act in the interest of each other
with respect to employees, pay employees by the same method, and share control over the
employees.
26.
Each Defendant possessed substantial control over the Plaintiffs' (and other
similarly situated employees') working conditions, and over the policies and practices with
- - - - - -re-speet-te-the-employment.and-compensation_oflh_e
individuals, referred to herein.
-6-
27.
Page 7 of 19
Defendants jointly employed the Plaintiffs, and all similarly situated individuals,
and are Plaintiffs' (and all similarly situated individuals') employers within the meaning of 29
U.S.C. 201 et seq. and the NYLL.
28.
Upon information and belief, Individual Defendant Michael Grimm operates the
Defendant Corporations, as either an alter ego of himself, and/or fails to operate the Defendant
Corporations as an entity legally separate and apart from himself, by, among other things:
a. failing to adhere to the corporate formalities necessary to operate Defendant
Corporations as separate and legally distinct entities;
b. defectively forming or maintaining Defendant Corporations, by among other
things failing to hold annual meetings or maintaining appropriate corporate
records;
c. transferring assets and debts freely as between all Defendants;
d. operating Defendant Corporations for his own benefit as the sole or majority
shareholder;
e. operating Defendant Corporations for his own benefit and maintaining control
over them as closed corporations or closely held controlled entities;
f.
Upon information and belief, Individual Defendant Bennett Orfaly operates the
Defendant Corporations, as either an alter ego of himself, and/or fails to operate the Defendant
-7-
.,
Page 8 of 19
Corporations as an entity legally separate and apart from himself, by, among other things:
a. failing to adhere to the corporate formalities necessary to operate Defendant
Corporations as separate and legally distinct entities;
b. defectively forming or maintaining Defendant Corporations, by among other
things failing to hold annual meetings or maintaining appropriate corporate
records;
c. transferring assets and debts freely as between all Defendants;
d. operating Defendant Corporations for his own benefit as the sole or majority
shareholder;
e. operating Defendant Corporations for his own benefit and maintaining control
over them as closed corporations or closely held controlled entities;
f.
At all relevant times, Defendants were the Plaintiffs' employers within the
meaning of the FLSA and New York Labor Law. Defendants had the power to hire and fire
Plaintiffs, control the terms and conditions of employment, and determine the rate and method of
any compensation in exchange for Plaintiffs' services.
32.
In each year from 2005 to the present, the Defendants had gross annual sales of
not less than $500,000 (exclusive of excise taxes at the retail level that are separately stated).
33.
In addition, upon information and belief, the Defendants and/or their enterpnse
were directly engaged in interstate commerce. For example, numerous items that were used in
- 8-
Page 9 of 19
the restaurant on a daily basis such as fruits, vegetables, bread, meat, dishwashing soaps, and
beverages were goods produced outside of the state of New York.
Individual Plaintiffs
34.
The Plaintiffs are former employees of the Defendants, who were ostensibly
216(b).
Plaintiff Perez was employed by Defendants from approximately April 2007 until
38.
up from the basement for the food preparer (approximately half an hour daily), bringing down
deliveries to the basement (approximately half an hour daily), and cleaning the restaurant
(approximately I hour and 30 minutes daily).
39.
approximately 2 hours and 30 minutes on a daily basis performing non-delivery work throughout
his employment with Defendants.
40.
-9-
41.
Filed 12/01/11
Page 10 of 19
judgment.
42.
43.
From approximately April 2007 until on or about March 25, 2011, Plaintiff Perez
worked a schedule of Sundays through Fridays from l 0:00 a.m. to 9:00 p.m. (typically 66 hours
per week).
44.
Plaintiff Perez was paid at the rate of$4.65 per hour in cash from approximately
April 2007 to October 2010. He then was paid the same hourly rate in cash and check from
approximately October 2010 to February 2011.
45.
Plaintiff Perez was paid at the rate of $5.00 per hour i,n cash and check from
Although Plaintiff Perez received tips for deliveries he made to customers, he was
never notified by Defendants that his tips would be included as an offset for wages.
47.
Defendants did not account for these tips in any daily, weekly, or other
Defendants did not provide Mr. Perez with any document or other statement
accounting for his actual hours worked, or setting forth the rate of pay for all of his hours
worked.
49.
No notification, either in the form of posted notices, or other means, was given to
Plaintiff Perez regarding overtime and wages under the FLSA and NYLL.
P/aintif!Carlos Perez
50.
'
Page 11 of 19
51.
52.
up from the basement for the food preparer (approximately half an hour daily), bringing down
deliveries to the basement (approximately half an hour daily), and cleaning the restaurant
(approximately 1 hour and 30 minutes daily).
53.
approximately 2 hours and 30 minutes on a daily basis performing non-delivery work throughout
his employment
54.
beverages and cleaning supplies produced outside the State of New York.
55.
judgment.
56.
57.
From approximately March 2010 until on or about March 10, 2011, Plaintiff
Carlos worked a schedule of Tuesdays through Saturdays from 5:00 p.m. to 12:00 a.m. and
Sundays from 10:00 a.m. to 9:00 p.m. (typically 46 hours per week).
58.
Plaintiff Carlos was paid at the rate of $4.65 per hour in cash from approximately
March 2010 to October 2010 and $4.65 per hour in cash and check from approximately October
2010 to February 2011.
59.
Plaintiff Carlos was paid at the rate of$5.00 per hour in cash and check from
was never notified by Defendants that his tips would be included as an offset for wages .
11 -
61.
Page 12 of 19
Defendants did not account for these tips in any daily, weekly, or other
Defendant did not provide Mr. Carlos with any document or other statement
accounting for his actual hours worked, or setting forth the rate of pay for all of his hours
worked.
63.
No notification, either in the form of posted notices, or other means, was given to
Plaintiff Carlos regarding overtime and wages under the FLSA and NYLL.
Defendants regularly required the Plaintiffs to work in excess of forty (40) hours
per week without paying them the proper minimum and overtime wages or spread of hours
compensation.
65.
practice of requiring the Plaintiffs and all similarly situated employees to work in excess of forty
(40) hours per week without paying them appropriate minimum wage and/or overtime
compensation, or spread of hours compensation, as required by federal and state laws.
66.
Defendants failed to post required wage and hour posters in Healthalicious, and
did not provide Plaintiffs with statutorily required wage and hour records or statements of their
pay received, in part so as to hide Defendants' violations of the wage and hour laws, and to take
advantage of Plaintiffs' relative lack of sophistication in wage and hour laws.
67.
All Plaintiffs were paid their wages wholly in cash until approximately October
2010 and in a combination of cash and check from approximately October 2010 to March 2011.
68.
Upon information and belief, these practices by Defendants were done willfully to
disguise the actual number of hours Plaintiffs (and similarly situated individuals) worked, and to
- 12 -
Page 13 of 19
avoid paying Plaintiffs properly for (1) their full hours worked, (2) for overtime due, and (3) for
spread of hours pay.
69.
Defendants failed to infonn the Plaintiffs that did receive tips that Defendants
intended to take a deduction against Plaintiffs' earned wages for tip income, as required by the
NYLL before any deduction may be taken.
70.
Defendants failed to maintain a record of the tips earned by Plaintiffs for the
by Defendants, although their actual duties included greater or equal time spent in non-delivery,
non-tipped functions such as maintenance, cleaning, receiving deliveries, and other duties.
- 13 -
74.
Page 14 of 19
and other employees, the required postings or notices to employees regarding the applicable
wage and hour requirements of the FLSA and NYLL.
FLSA COLLECTIVE ACTION CLAIMS
75.
Plaintiffs bring their FLSA minimum wage, overtime, and liquidated damages
claims as a collective action pursuant to FLSA Section 16(b), 29 U.S.C. 216(b), on behalf of all
similarly situated persons who are or were employed by Defendants or any of them, on or after
the date that is three years before the filing of the complaint in this case (the "FLSA Class
Period"), as employees of Defendants (the "FLSA Class").
76.
At all relevant times, Plaintiffs, and other members of the FLSA Class who are
and/or have been similarly situated, have had substantially similar job requirements and pay
provisions, and have been subject to Defendants' common practices, policies, programs,
procedures, protocols and plans of willfully failing and refusing to pay them at a one and onehalf their regular rates for work in excess of forty (40) hours per workweek, and willfully failing
to keep records required by the FLSA.
77.
The claims of Plaintiffs stated herein are similar to those of the other employees.
Plaintiffs repeat and reallege all paragraphs above as though fully set forth herein.
79.
At all times relevant to this action, Defendants were Plaintiffs' employers within
the meaning of the Fair Labor Standards Act, 29 U.S.C. 203(d). Defendants had the power to
- 14 -
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Page 15 of 19
hire and fire Plaintiffs, control the tenns and conditions of employment, and detennine the rate
and method of any compensation in exchange for their employment.
80.
Defendants' failure to pay Plaintiffs at the applicable minimum hourly rate was
Plaintiffs repeat and reallege all paragraphs above as though fully set forth herein.
86.
compensation at rates of one and one-half times the regular rate of pay for each hour worked in
excess of forty hours in a workweek, in violation of29 U.S.C. 207(a)(I).
87.
Defendants' failure to pay Plaintiffs and the putative FLSA Class members
overtime compensation was willful within the meaning of29 U.S.C. 255(a).
88.
Plaintiffs repeat and reallege all paragraphs above as though fully set forth herein .
15 -
90.
Page 16 of 19
At all times relevant to this action, Defendants were Plaintiffs' employers within
the meaning of the N.Y. Lab. Law 2 and 651. Defendants had the power to hire and fire
Plaintiffs, control their terms and conditions of employment, and determine the rates and
methods of any compensation in exchange for their employment.
91.
Defendants, in violation of the NYLL, paid Plaintiffs less than the minimum wage
in violation ofNYLL 652(1) and the supporting regulations of the New York State Department
of Labor.
92.
Defendants' failure to pay Plaintiffs the minimum wage was willful within the
94.
Plaintiffs repeat and reallege all paragraphs above as though fully set forth herein.
95.
Defendants, in violation of the NYLL and associated rules and regulations, failed
to pay Plaintiffs overtime compensation at rates of one and one-half times the regular rate of pay
for each hour worked in excess of forty hours in a workweek, in violation ofN.Y. Lab. Law
190 et seq. and supporting regulations of the New York State Department of Labor.
96.
Defendants' failure to pay Plaintiffs overtime compensation was willful within the
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Page 17 of 19
99.
Plaintiffs repeat and reallege all paragraphs above as though fully set forth herein.
100.
Defendants failed to pay Plaintiffs one additional hour's pay at the basic
minimum wage rate before allowances for each day Plaintiff's spread of hours exceeded ten
hours in violation of New York Lab. Law 190 et seq. and 650 et seq. and the wage order of
the New York Commissioner of Labor codified at N.Y. COMP. CODES R. & REGS. Tit. 12, 1371.7 and 137-3.11.
101.
Defendants' failure to pay Plaintiffs an additional hour's pay for each day
Plaintiffs' spread of hours exceeded ten hours was willful within the meaning of New York Lab.
Law 663.
102.
WHEREFORE, Plaintiffs respectfully request that this Court enter judgment against
Defendants:
(a)
notice pursuant to 29 U.S.C. 216(b) to all putative class members, apprising them of the
pendency of this action, and permitting them promptly to file consents to be Plaintiffs in the
FLSA claims in this action;
) -Beclaring-that-Befendants-have-vielated-the-mini-mum-wagG-pre-v-isionS-Qf,anu--- - - - - - associated rules and regulations under, the FLSA as to Plaintiffs (including the prospective
collective class members);
- 17 -
,__ _
(c)
Filed 12/01/11
Page 18of19
Declaring that Defendants have violated the overtime wage provisions of, and
associated rules and regulations under, the FLSA as to Plaintiffs (including the prospective
collective class members);
(d)
Declaring that the Defendants have violated the recordkeeping requirements of,
and associated rules and regulations under, the FLSA with respect to Plaintiffs' (and the
prospective collective class members') compensation, hours, wages, and any deductions ot
credits taken against wages;
(e)
Declaring that Defendants' violations of the provisions of the FLSA were willful
(f)
for the amount of unpaid minimum and overtime wages, and damages for any improper
deductions or credits taken against wages under the FLSA as applicable;
(g)
liquidated damages in an amount equal to 100% of their damages for the amount of unpaid
minimum and overtime wages, and damages for any improper deductions or credits taken against
wages under the FLSA as applicable pursuant to 29 U.S.C. 216(b);
(h)
Declaring that Defendants have violated the minimum wage provisions of, and
Declaring that Defendants have violated the overtime wage provisions of, and
G)
Declaring that Defendants have violated the Spread of Hours Wage Order of the
_,_I
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Page 19 of 19
the NYLL with respect to Plaintiffs' compensation, hours, wages; and any deductions or credits
taken against wages;
(1)
Declaring that Defendants' violations of the New York Labor Law and Spread of
Awarding Plaintiffs damages for the amount of unpaid minimum and overtime
wages, damages for any improper deductions or credits taken against wages, as well as awarding
spread of hours pay under the NYLL as applicable;
(n)
(25%) of the total amount of minimum vvage, spread of hours pay, and overtime compensation
shown to be owed pursuant to NYLL 663 as applicable;
(o)
expenses incurred in this action, including costs and attorneys' fees; and
(q)
All such other and further relief as the Court deems just and proper.
\ '":d-- '-..-""'
By:
Michael Faillace [MF-8436]
110 East 59 111 Street, 32nd Floor
w York New York I 0022
Telephone: (212) 317-1200
Facsimile: (212) 317-1620
Allorneys.for Plaint{ffs
- 19 -
EXHIBIT G
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- -
11 Civ. 08736-CM
vs.
GRANNY SAYZ LLC, et. al.,
Defendants.
---------------------------------------------------------------x:
DEFENDANT MICHAEL GRIMM'S ANSWER AND DEFENSES TO
PLAINTIFFS' COMPLAINT
Defendant Michael Grimm (Defendant), hereby submits this Answer and Defenses to the
Complaint ("Complaint") of Plaintiffs Regino Perez et. al. ("Plaintiffs"), in accordance with the
numbered paragraphs thereof, as follows:
1.
Ex:cept to admit that Plaintiff Regino Perez was employed by one or more of the
corporate defendants for a period of time, and to deny that he has sufficient knowledge or
information to admit or deny whether Plaintiff Carlos Perez was ever employed by any
1
individual or entity, Defendant denies the allegations contained in Paragraph 1 of the Complaint.
2.
Ex:cept to admit that Granny Sayz LLC operated a health food restaurant located
at 1594 2nd Avenue, New York, New York under the name Healthalidous, Defendant denies the
allegations contained in Paragraph 2 of the Complaint.
3.
required. To the ex:tent a response is required Defendant denies the allegations contained in
Paragraph 3 of the Complaint.
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4.
Except to admit that Plaintiff Regino Perez was employed as a delivery person by
one or more of the corporate defendants for a period of time, and to deny that he has sufficient
knowledge or information to admit or deny whether Plaintiff Carlos Perez was ever employed by
any individual or entity, Defendant denies the allegations contained in Paragraph 4 of the
Complaint.
5.
6.
7.
8.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 8 of the Complaint.
9.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 9 of the Complaint.
IO.
11 .
Except to aver that he does not have sufficient knowledge or information to admit
or deny any allegations regarding the period from May of2009 to the present, Defendant denies
the allegations contained in Paragraph 11 of the Complaint.
12.
required. To the extent a response is required Defendant denies that he has sufficient knowl~dge
or information to admit or deny why Plaintiffs brought this action and whether they do so for any
other individuals, denies the remaining allegations contained in Paragraph 12 of the Complaint,
and denies that the Plaintiffs are entitled to any damages of any kind or nature.
""'"....,-;
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13.
required. To the extent a response is required Defendant denies that he has sufficient knowledge
or information to admit or deny whether Plaintiffs seek certification of this action and whether
they do so for any other individuals, and denies the remaining allegations contained in Paragraph
13 of the Complaint.
14.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 14 of the Complaint.
15.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 15 of the Complaint.
16.
Plaintiff Regino Perez' current place of residence. Defendant denies the remaining allegations
contained in Paragraph 16 of the Complaint.
17.
Defendant denies that he has any information about Plaintiff Carlos Perez and
therefore denies having sufficient knowledge or information to admit or deny the allegations in
Paragraph 17 of the Complaint.
18.
Except to admit that Granny Sayz LLC operated a health food restaurant located
at 1594 2nd Avenue, New York, New York under the name Healthalicious, Defendant denies the
allegations contained in Paragraph 18 of the Complaint.
19.
Except to admit that Granny Sayz LLC was a New York domestic corporation
which operated as a health food restaurant located at 1594 2nd Avenue, New York, New York
,--:
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under the name Healthalicious, Defendant denies having sufficient knowledge or information to
admit or deny the allegations in Paragraph 19 of the Complaint.
20.
1594 2nd Avenue, New York, New York, Defendant denies having sufficient knowledge or
information to admit or deny the allegations in Paragraph 19 of the Complaint.
21.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 21 of the Complaint.
22.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 23 of the Complaint.
24.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 24 of the Complaint.
25 .
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 25 of the Complaint.
26.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 26 of the Complaint.
27.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 27 of the Complaint.
28.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 28 of the Complaint.
29.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 29 of the Complaint.
30.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 31 of the Complaint.
32.
any allegations regarding the period from May of 2009 to the present, Defendant denies the
allegations contained in Paragraph 32 of the Complaint.
33.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 33 of the Complaint.
34. Except to deny that he has any information about Plaintiff Carlos Perez and therefore
denies having sufficient knowledge or information to admit or deny the allegations in Paragraph
34 of the Complaint about Carlos Perez, Defendant denies the allegations contained in Paragraph
34 of the Complaint.
35.
required. To the extent a response is required Defendant denies that he has sufficient knowledge
or information to admit whether Plaintiffs seek to represent anyone else, including a class of
individuals.
36.
Except to admit that Plaintiff Regino Perez was employed as a delivery person by
one or more of the corporate defendants for a period of time, Defendant denies that he has
sufficient knowledge or information to admit or deny the remaining allegations contained in
Paragraph 36 of the Complaint.
37.
38.
Except to admit that Plaintiff Regino Perez' duties including making deliveries
and occasionally assisting in moving items including deliveries, Defendant denies the allegations
contained in Paragraph 38 of the Complaint.
39.
40.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 40 of the Complaint.
41.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 41 of the Complaint.
42.
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43.
47.
49.
50.
Defendant denies that he has any information about Plaintiff Carlos Perez and
therefore denies having sufficient knowledge or information to admit or deny the allegations in
Paragraph 50 of the Complaint.
"
51.
Defendant denies that he has any information about Plaintiff Carlos Perez and
(
therefore denies having sufficient knowledge or information to admit or deny the allegations in
Paragraph 51 of the Complaint.
52.
Defendant denies that he has any information about Plaintiff Carlos Perez and
therefore denies having sufficient know,ledge or information to admit or deny the allegations in
Paragraph 52 of the Complaint.
53.
Defendant denies that he has any information about Plaintiff Carlos Perez and
therefore denies having sufficient knowledge or information to admit or deny the allegations in
Paragraph 53 of the Complaint.
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54.
Defendant denies that he has any information about Plaintiff Carlos Perez and
therefore denies having sufficient knowledge or information to admit or deny the allegations in
Paragraph 54 of the Complaint.
55 .
Defendant denies that he has any information about Plaintiff Carlos Perez and
therefore denies having sufficient knowledge or information to admit or deny the allegations in
Paragraph 55 of the Complaint.
56.
Defendant denies that he has any information about Plaintiff Carlos Perez and
therefore denies having sufficient knowledge or information to admit or deny the allegations in
Paragraph 56 of the Complaint.
57.
Defendant denies that he has any information about Plaintiff Carlos Perez and
therefore denies having sufficient knowledge or information to admit or deny the allegations in
Paragraph 57 of the Complaint.
58.
Defendant denies that he has any information about Plaintiff Carlos Perez and
therefore denies having sufficient knowledge or information to admit or deny the allegations in
Paragraph 58 of the Complaint.
59.
Defendant denies that he has any information about Plaintiff Carlos Perez and
therefore denies having sufficient knowledge or information to admit or deny the allegations in
Paragraph 59 of the Complaint.
60.
Defendant denies that he has any information about Plaintiff Carlos Perez and
therefore denies having sufficient knowledge or information to admit or deny the allegations in
Paragraph 60 of the Complaint.
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Case 1:14-cr-00248-PKC-RML Document 94-7 Filed 06/19/15 Page 10 of 18 PageID #: 590
- I - - -- ---
61.
Defendant denies that he has any information about Plaintiff Carlos Perez and
therefore denies having sufficient knowledge or information to admit or deny the allegations in
Paragraph 61 of the Complaint.
62.
Defendant denies that he has any information about Plaintiff Carlos Perez and
therefore denies having sufficient knowledge or information to admit or deny the allegations in
Paragraph 62 of the Complaint.
63.
Defendant denies that he has any information about Plaintiff Carlos Perez and
therefore denies having sufficient knowledge or information to admit or deny the allegations in
Paragraph 63 of the Complaint.
64.
65.
66.
67.
69.
70.
71.
72.
73.
74.
75.
required. To the extent a response is required Defendant denies that he has sufficient knowledge
.or infonnation to admit or deny why Plaintiffs brought this action and whether they do so for any
other individuals.
76.
77.
78.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 79 of the Complaint.
80.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 80 of the Complaint.
81.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 81 of the Complaint.
82.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 82 of the Complaint.
83.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 83 of the Complaint.
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I
I
Case 1:14-cr-00248-PKC-RML Document 94-7 Filed 06/19/15 Page 12 of 18 PageID #: 592
84.
required. To the extent a response is required Deferidant denies the allegations contained in
Paragraph 84 of the Complaint and denies that Plaintiffs are entitled to any damages of any kind
or nature.
SECOND CAUSE OF ACTION
85.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 86 of the Complaint.
87.
87.
response is required. To the extent a response is required Defendant denies the allegations
contained in Paragraph 87 of the Complaint.
88.
denies that Plaintiffs are entitled to any damages of any kind or nature.
THIRD CAUSE OF ACTION
89.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 89 of the Complaint.
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..:;'
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90.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 90 of the Complaint.
91.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 91 of the Complaint.
92.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 92 of the Complaint.
93.
denies that Plaintiffs are entitled to any damages of any kind or nature.
FOURTH CAUSE OF ACTION
94.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 95 of the Complaint.
96.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 96 of the Complaint.
97.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph 97 of the Complaint.
j. ;--::__
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98.
denies that Plaintiffs are entitled to any damages of any kind or nature.
FIFTH CAUSE OF ACTION
99.
through 98 of the
100.
Compl~int
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph I 00 of the Complaint.
101.
required. To the extent a response is required Defendant denies the allegations contained in
Paragraph I 01 of the Complaint.
102.
Defendant denies the allegations contained in Paragraph 102 of the Complaint and
denies that Plaintiffs are entitled to any damages of any kind or nature.
PRAYER FOR RELIEF
Defendant denies that Plaintiffs are entitled to any relief of any kind from Defendants,
including the remedies described and the relief requested in the Prayer for Relief, including in
sub-paragraphs (a) through (q) inclusive.
JURY DEMAND
Defendant objects to any demand for trial by jury to the extent Plaintiff seeks equitable
remedies, as those remedies are to be decided by the Court.
GENERAL DENIAL
Defendant denies each and every allegation in the Complaint not specifically admitted
herein.
':;:
I.
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=-
DEFENSES
At this time, Defendant asserts the following defenses to the claims in the Complaint:
FIRST DEFENSE
1.
Neither the Complaint as a whole nor the causes of action alleged therein state
facts sufficient to constitute a cause of action upon which relief can be granted against
Defendant.
SECOND DEFENSE
(Statutes of Limitations)
2.
The claims of Plaintiff and of each putative class member are barred in whole or
in part by any and all applicable statutes of limitations, including, but not limited to 29 U.S.C.
section 255(a).
THIRD DEFENSE
3.
The claims of Plaintiff and of each putative class member are barred in whole or
4.
The claims of Plaintiff and of each putative class member are barred in whole or
in part because such claims have been waived, discharged, and/or released.
FIFTH DEFENSE
(Laches)
5.
(Unclean Hands)
1. , _ -
6.
The claims of Plaintiff and of each putative class member are barred in whole or
SEVENTH DEFENSE
(Estoppel)
7.
The claims of Plaintiff and of each putative class member are barred in whole or
EIGHTH DEFENSE
(Failure to Meet Requirements for Collective Action)
8.
Plaintiff and/or the putative class members do not meet the requirements of 29
U.S.C. Section 216(b), and thus this action cannot be maintained as a collective action.
NINTH DEFENSE
(Not Appropriate for Collective Action)
9.
The types of claims alleged in the Complaint on behalf of Plaintiff and the
purported class and subclass are matters in which individual questions predominate and,
accordingly, Plaintiff fails to satisfy any of the prerequisites for collective certification as to any
cause of action.
TENTH DEFENSE
(Inadequate Representative)
10.
The Complaint fails to the extent it asserts a collective action because Plaintiff i ;
ELEVENTH DEFENSE
(Setoff and Recoupment)
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TWELFTH DEFENSE
(Conduct Reasonable and In Good Faith/Not Willful)
12.
action member, any amount due, which allegations Defendant denies, Defendant acted at all
times on the basis of a good faith and reasonable belief that Defendant's conduct was not willful
within the meaning of any federal wage and hour law.
THIRTEENTH DEFENSE
(Acts or Omissions Made in Good Faith)
13.
nor any putative collective action member is entitled to liquidated damages because any alleged
act or omission by Defendant was in good faith and Defendant had reasonable grounds for
believing that its conduct did not violate any wage and hour laws.
RESERVATION OF RIGHTS
Defendant reserves the right to assert such additional defenses that may appear and prove
applicable during the course of this litigation.
CERTIFICATE OF SERVICE
I hereby ce1tify that I caused to be served a trne and correct copy of Defendant Michael
Grimm's Answer and Defenses to Plaintiffs Complaint, by regular mail this 28th day of
February, 2012 on:
Michael Faillace
Michael Faillace & Associates, P.C.
110 East 59th Street, 32nd Floor
New York, NY 10022
!..-__
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EXHIBITH
.
I'
METRO
SI pol's partner is
capo's good pal
October 8, 2012 I 4:0Dam
By Mitchel Maddux
SUSP ICIOUS: Shady restaurant owner Bennett Orfaly went into business with Staten Island Rep.
Michael Grimm (above). a former FBI agent.
SUSPICIOUS : Shady restaurant owner Bennett Orfaly (left) went into business with Staten
Island Rep. Michael Grimm (right), a former FBI agent. (
)
sen~ng
Asked about his Gambino connections, Orfaly declined to comment. Grimm is under
investigation for alleged fund-raising irregularities in his 2010 campaign.
As an FBI a_~ent , (}ri1!1m wa~~esp011sible for keep_i_n_~ t:~bs on Joh.n _Go!ti's ~i:_other
Peter. He also worked undercover on lffi~eJ1jYEf~il!'<f~lfiltiN'11'1ijSJpft1i~@~
soldier Greg DePalma.
after NJ bus crash
f-
EXHIBIT I
I http://nyti.ms/1 rES04n
N.Y. I REGION
2014
For more than two years, federal investigators delved into the background of
Representative Michael G. Grimm, a Republican from Staten Island now in his
second term. They looked into his campaign finances, and examined the potential
mob ties of one business associate and the illegal doings of another.
On Monday, Mr. Grimm was indicted in Federal District Court in Brooklyn, but
the charges arose not from his career in Congress, but from his earlier one - as a
health-food restaurateur.
In a 20-count indictment, Mr. Grimm was accused of underreporting wages and
revenue while running an Upper East Side restaurant, essentially keeping two sets of
records. The fraudulent records, prosecutors said, went to his accountant, leading to
inaccurate tax forms being filed with the government.
Pros~cutors say that Mr. Grimm concealed more than $1 million in gross
receipts for the restaurant, and failed to report hundreds of thousands of dollars in
employee wages, thus fraudulently lowering his federal and state tax payments.
According to the indictment, unsealed on Monday, he also lied under oath in a
deposition taken in January 2013, while he was a member of Congress.
Mr. Grimm was charged with, among other things, perjury, wire fraud, mail
fraud, obstruction of justice, employment of illegal immigrants, obstructing and
impeding tax laws, and conspiracy to defraud the United States.
Mr. Grimm, 44, is a former Federal Bureau of Investigation agent and Marine
who emphasized his upright image while he ran for Congress, where he represents
Staten Island and parts of Brooklyn. He surrendered to F.B.I. agents early on
Monday, and pleaded not guilty in court later in the day.
He was released on $400,ooo bail, secured by his house on Staten Island, and
left the courthouse saying he would return to work and to his campaign for a third
term.
"After two and a half years of just being deluged and bombarded with allegation
after allegation after allegation, I haven't been able to fully defend myself," Mr.
Grimm said at a news conference after his arraignment. While he declined to
comment onthe charges, he said he would "fight tooth and nail" against them.
Mr. Grimm also informed the House speaker, John A. Boehner, that he was
stepping aside from his position on the Financial Services Committee. A spokesman
for the speaker said Mr. Boehner believed that the move was "appropriate under the
circumstances."
The indictment creates potential problems for the Republican Party, which has
backed Mr. Grimm, the only Republican in the New York City delegation, in his bid
for a third congressional term this November against the Democratic challenger,
Domenic M. Recchia Jr. The deadline to turn down his party's nomination passed
two weeks ago, meaning that Mr. Grimm is highly likely to stay on the ballot no
matter what happens with the federal case.
Though the investigation, by the United States attorney's office for the Eastern
District of New York and the F.B.I., began by focusing on fund-raising, it took a turn
midcourse to focus on the restaurant. Two fund-raisers on Mr. Grimm's campaign
have been charged: Diana Durand of Houston, who was accused of illegally giving
more than $10,000 to his campaign, and Ofer Biton, who was being investigated to
determine whether he had helped Mr. Grimm get around campaign-donation limits.
Mr. Biton has pleaded guilty to visa fraud charges.
Mr. Biton and another man, Wayne Muratore, a certified public accountant
from Brooklyn, were involved in both Mr. Grimm's 2010 campaign and his
restaurant business, providing a possible link that could have turned investigators
from looking at the campaign to looking at Healthalicious. Mr. Muratore has not
been charged.
,_
r----
Loretta E. Lynch, the United States attorney for the Eastern District of New
York, did not detail why the investigation had changed. "Whenever there's an
investigation into someone's business activities, it is usually very broad-reaching,"
she said, adding that a larger investigation was continuing.
But, she said, Mr. Grimm had a sophisticated understanding of the law and
finance, thanks in part to his background as an F.B.I. agent, where he did undercover
work on Wall Street.
An F.B.I. assistant director, George Venizelos, said revisiting Mr. Grimm's F.B.I.
work, given the charges, is "something we definitely will look at."
At the heart of Mr. Grimm's indictment was a "very simple scheme," Ms. Lynch
said. After leaving the F.B.I. in 2006, Mr. Grimm opened Healthalicious, a salad-and
-wrap restaurant on Second Avenue near East 83rd Street.
Between 2007 and 2010, the indictment says, Mr. Grimm paid "a significant
portion" of employees' wages in cash, with many workers receiving about half their
pay through direct deposit or check, and the other half in cash. He kept two sets of
payroll records, and concealed the electronic spreadsheets that detailed what he was
actually paying from payroll-processing companies and an accountant, the
indictment says. That led to the payroll companies' inadvertently filing erroneous tax
forms, since the forms were based on the fake records.
In some cases, the indictment says, Mr. Grimm paid employees entirely in cash
so that the payroll processors had no records of those workers at all.
The indictment describes how, from March 2010 to June 2010, Mr. Grimm sent
emails to the restaurant manager that had "excerpts from the second set of payroll
records, detailing how much cash each Healthalicious employee should receive for a
particular week." Those emails, as well as the mailed tax returns that were said to be
based on inaccurate information, resulted in the wire and mail fraud charges.
The concealment, perjury and obstruction of justice charges come in connection
with a January 2013 deposition given by Mr. Grimm as part of a lawsuit by two
former Healthalicious employees who accused him of not paying them minimum
wages or overtime.
The indictment accuses Mr. Grimm oflying under oath about whether he paid
employees in cash, whether he corresponded through an email account regarding the
Healthalicious business, and whether he still had access to such an account.
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