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Rep. Michael Grimm (R) of New York was indicted on Monday on federal fraud charges related to his operation of a Manhattan restaurant named Healthalicious prior to his election to Congress in 2010.

According to court documents unsealed Monday Representative Grimm engaged in a complex scheme that hid more than $1 million in Healthalicious receipts from tax authorities. Employees were paid with bills skimmed from the restaurant cash register; some got more than half their pay in cash, according to federal authorities. Grimm kept a separate set of books that tracked the restaurant鈥檚 true financial condition, and lied under oath when questioned on the matter after former employees sued, saying they had not been paid minimum wage.

Prior to his food industry work Grimm himself served in federal law enforcement as a member of the FBI. Thus officials were scathing about the alleged activities of someone who used to be one of their own.

鈥淎s a former FBI agent, Representative Grimm should understand the motto: fidelity, bravery and integrity,鈥� said FBI assistant director George Venizelos in a statement. 鈥淵et he broke our credo at nearly every turn.鈥�

Rep. Grimm pleaded not guilty to the charges and was released on $400,000 bail, secured by his house. He said he would mount a vigorous defense while continuing to run for reelection in November.

At a news conference Monday Grimm insisted that the federal prosecution he now faces is part of an effort 鈥渢o assassinate my character and remove me from office.鈥�

He has been targeted because he won office despite not being part of any 鈥減olitical machine,鈥� said Grimm.

He said he would fight 鈥渢ooth and nail until I am fully exonerated.鈥�

Grimm, who represents a Staten Island district, is the only Republican in the New York City congressional delegation. Prior to his indictment he might be best known outside his city for threatening physical violence to a cable news reporter who asked him about his legal troubles in January.

A running camera caught Grimm saying to NY1鈥檚 Michael Sotto that 鈥淚鈥檒l break you in half. Like a boy.鈥�

An avid weightlifter, Grimm is known to New York鈥檚 feisty tabloids as 鈥淢ikey Suits.鈥�

While Grimm鈥檚 indictment was expected, the charges themselves were something of a surprise. Observers had instead thought he might be caught up in a widening campaign finance scandal which involves alleged 鈥渟traw man鈥� donations to his campaign that violate legal individual limits.

Grimm has acknowledged receiving at least $250,000 in contributions for his 2010 congressional race from followers of an Israeli rabbi, Yoshiyahu Yosef Pinto. Some of Mr. Pinto鈥檚 congregants have since said they made tens of thousands of dollars in illegal contributions.

The Israeli businessman who served as Grimm鈥檚 connection to Pinto鈥檚 followers has pleaded guilty to an immigration fraud charge.

In addition, a Houston businesswoman and former close friend of Grimm鈥檚 named Diana Durand has been charged with illegally contributing more than $10,000 to Grimm鈥檚 campaign.

The Staten Island congressman himself has not been charged in these matters and denies wrongdoing. Federal officials said their investigation was continuing.

Meanwhile, the timing of Grimm鈥檚 indictment is drawing scrutiny from some Republicans. It comes just after the April 10 New York deadline for filing to run in the fall federal elections.

That means Grimm is the GOP鈥檚 best hope for keeping the seat. Given his legal troubles, political prognosticators are already preparing his obituary. Charlie Cook鈥檚 Political Report has switched its rating on his district from 鈥淟ean Republican鈥� to 鈥淟ean Democratic,鈥� for example. University of Virginia political scientist Larry Sabato鈥檚 Crystal Ball newsletter has done the same thing.

Noting that the prosecutor who oversaw Grimm鈥檚 indictment, US Attorney Loretta Lynch of the Eastern District of New York, is an Obama appointee, Dan Riehl at the right-leaning Breitbart.com writes that some may call the affair a 鈥減olitically-motivated prosecution.鈥�

A final aspect of the indictment that was unexpected was its charge that Grimm allegedly hired undocumented immigrants to work at his restaurant.

The course of immigration reform has not run smooth among House Republicans in recent months. However, at The Huffington Post, Ryan Reilly and Elise Foley report that Grimm is one of the few GOP members of the House to support a measure that would allow undocumented immigrants a path to legal residency.

鈥淚f Grimm were to leave Congress, reform supporters would lose an ally in the House,鈥� they write.