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US Attorney Not the First to Raise Questions About 'Healthalicious'

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The charges against Michael Grimm all revolved around his restaurant, a surprise to some since much of the investigation was focused on his campaign finances, but the U.S. attorney is not the first person to raise some questions about Healthalicious. NY1's Courtney Gross filed the following report.

A so-called health food spot, Healthalicious is now a neighborhood joint with a reputation well beyond the Upper East Side because its former owner is Rep. Michael Grimm.

The restaurant is at the center of a 20-count indictment against the congressman charging him with tax evasion and fraud.

It claims that Grimm hid more than $1 million from the restaurant's income to cheat Uncle Sam out of taxes.

However, some say Grimm had some other questionable business practices at Healthalicious.

"Almost every restaurant in New York that we sue does the same thing. It gets delivery workers to perform this non-delivery duties, pays them what's called a tip credit rate, and pays them in cash," said Attorney Michael Faillace.

Faillace is talking about a lawsuit he filed in 2011 on behalf of two deliverymen. The case alleges that Grimm was cheating his workers out of wages, and it appears to have provided some ammunition for U.S. Attorney Loretta Lynch.

"The lawsuit came, the lawsuit that threatened to expose his practices for what they were, a lie and a cheat."

The lawsuit eventually settled out of court, and people affiliated with the case declined to discuss those details with NY1.

Nonetheless, industry experts NY1 spoke with say the charges against the congressman aren't unique for the restaurant industry. Owners pay their workers in cash and off the books.

"It's not uncommon for employees, either delivery persons or people in the back of the house, waiters, to be paid incorrectly," said Louis Pechman of

"This is general practice by most restaurants," Faillace said.

Grimm got rid of his stake in Healthalicious before he took his seat in congress.

It now has at least one thing going for it. It has an A sanitary inspection grade. ClientIP:, UserAgent: CCBot/2.0 ( Profile: TWCSAMLSP