A onetime business partner of former U.S. Representative Michael Grimm was sentenced to six months in prison on Thursday after pleading guilty on Tuesday to a tax charge in a case related to an investigation of the convicted Republican politician.
Bennett Orfaly, 52, was sentenced by U.S. District Judge Pamela Chen after pleading guilty in April to having aided and assisted in the preparation of a false tax return.
While his plea pertained only to a tax return for the Pita Grill Murray Hill restaurant in 2009, prosecutors said that his scheme was broader and involved about $3 million in unreported gross receipts at five restaurants over a number of years.
“This was fraud by design for a long period of time,” Assistant U.S. Attorney Nathan Reilly said in court.
Orfaly, who was also ordered to pay $717,527 in restitution to the government, said, “I am deeply remorseful for my actions that brought me here today.”
The case stemmed from an investigation of Grimm, a former Marine and FBI agent who from 2011 to 2015 represented a district that included the New York City borough of Staten Island and parts of Brooklyn.
Grimm, 46, was recently released from prison after being sentenced in July 2015 to an eight-month term for his guilty plea to a tax charge in connection with Healthalicious, a Manhattan restaurant he co-founded with Orfaly.
Grimm, who oversaw the day-to-day operations of Healthalicious from 2007 to 2010, had by then resigned from office after pleading guilty in December 2014 following his indictment that April in connection with the restaurant.
Prosecutors said Grimm under-reported wages paid to workers, many of whom did not have legal status in the United States, and concealed more than $900,000 in Healthalicious’ gross receipts from an accountant who prepared the restaurant’s tax returns.
While Orfaly was interviewed by authorities about Healthalicious and his case related to Grimm’s, his plea did not involve that restaurant.
Nonetheless, Chen, in sentencing Orfaly, said in some ways, his conduct was worse than Grimm’s in terms of scale and that he “chose to value the interests of himself and his family over the concerns of others.”
(Reporting by Nate Raymond; Editing by Bill Trott)