Two weeks ago, one of the people allegedly involved in that scheme — Diana Durand, a former girlfriend of Grimm's — was arrested in Houston for election fraud and lying to federal agents. Over the summer, another donor copped to a visa violation for his alleged role in pushing money to Grimm. Grimm's lawyer offered a statement on Durand: "We are saddened that the government took the extraordinary step of arresting a single mother on these allegations."
He's a veteran and former FBI agent with a sketchy background in business.
When Grimm ran for election that year, the Staten Island Advance said that he "remains an enigma to residents" of the New York borough that makes up the bulk of his congressional district.
What they did know came largely from his campaign biography: leaving college to join the Marines, serving in the first Gulf War, joining the FBI as an undercover agent focused on financial crimes.
In 2012, The New York Times profiled Grimm's unusual work record. "Before becoming an F.B.I. agent for a decade," the newspaper writes, "Mr. Grimm worked for a year for a small firm on Wall Street that frequently ran into problems with regulators and customers, regulatory filings show. But his official biographies do not mention the firm, Whale Securities." When he left the Bureau, he founded a restaurant, Healthalicious, which "has been accused in a lawsuit of cheating its workers and fined by the state for failing to carry workers’ compensation."
The Times also dug into his business relationship with a former FBI colleague, Carlos Luquis, who ended up being imprisoned after being convicted of stealing millions of dollars from customers of an electricity company in Texas. "In May 2006, days after Mr. Grimm left the F.B.I., he and a partner, Harold Rosenbaum, borrowed $1.34 million from a bank and agreed to pay $965,000 to Mr. Luquis’s company, Hill Castle Homes, to build a house near Austin, Tex., according to property and court records." Later, Grimm allegedly asked to be released from a debt to a contractor after saying that "the builder" had "misappropriated a large portion of the construction loan." When Luquis was released on parole, Grimm gave him a job at a biofuel company he founded in Austin.
His biggest FBI success was questioned by The New Yorker.
In May of 2011, The New Yorker looked at the FBI's use of paid informants through the lens of an operation called "Wooden Nickel" — starring none other then FBI Agent Michael Grimm. The operation resulted in a number of arrests for financial crimes thanks to Grimm's undercover work, but also raises questions about the extent to which the agency (and Grimm) relied on the questionable work of a colorful informant named Josef Franz Prach von Habsburg-Lothringen.
Among those arrested was Albert Santoro, who was charged with money laundering after being given $100,000 by Grimm. That investigation was cut short when one of Santoro's employees tipped her boss off that Grimm, who was undercover and using the name Garibaldi, was enrolled in her night law school class using his real name. Santoro was "arrested early" as a result, according to Grimm — before he actually laundered that $100 grand.