Congressman Michael Grimm accused of business tax fraud

Lynch said Grimm, a former Marine and FBI agent, had "turned his back on every oath he had ever taken"

A US congressman has pleaded not guilty to charges he defrauded tax collectors while running a health food restaurant before he was elected to office.

New York Republican Michael Grimm was arrested and charged with 20 counts of fraud and other crimes.

Prosecutors allege he concealed from tax authorities more than $1m (£595,000) in sales and hired undocumented immigrants.

Mr Grimm is also accused of lying under oath about his business practices.

A lawyer for the congressman, a former FBI agent and marine, has said the case against Mr Grimm was "politically driven".

"Congressman Grimm asserts his innocence of any wrongdoing," William McGinley said.

The New York congressman, who was elected in 2010, was caught on camera in January threatening to throw a reporter who questioned him about an investigation into his campaign funding off a balcony in the US capitol building. He later apologised.

Grimm is the only Republican in New York City's congressional delegation

Breaking the law

According to an indictment released on Monday, in 2007-10 Mr Grimm was running the day-to-day operations of Healthalicious, a restaurant in New York city's Manhattan borough, when he under-reported more than $1m in sales, reducing his tax costs.

He paid workers in untracked cash and hired workers who were in the US illegally, further reducing the business' tax burden, the indictment alleges.

Prosecutors said Mr Grimm lied about these practices under oath during a deposition for a lawsuit filed by workers at the restaurant.

"In 2007, Michael Grimm, former Marine, former FBI agent, accountant and attorney, was poised for success as a small business owner," US Attorney Loretta Lynch said on Monday. "Instead, as alleged, Grimm made the choice to go from upholding the law to breaking it. In so doing he turned his back on every oath he had ever taken."

Mr Grimm had expected federal charges, his lawyer said on Friday, but the US justice department had previously said it was also investigating Mr Grimm for possible campaign finance violations.

No campaign finance charges were levelled against Mr Grimm on Monday.

He has previously acknowledged receiving $250,000 to $300,000 in contributions from followers of an Israeli rabbi, Yoshiyahu Yosef Pinto, some of whom later said they made illegal contributions. Mr Grimm has denied knowledge of any illegal action.

On Friday, a woman who had been romantically involved with Mr Grimm was charged with using fake donors to make illegal contributions to his campaign.