Grimm is accused of under-reporting the wages and payroll at the Healthalicious health food store he bought in 2006. Grimm concealed more than $1 million in gross receipts, and hundreds of thousands of dollars in employee wages, according to the indictment. Federal prosecutors say he avoided federal and state tax law. This all happened before he was elected, but prosecutors also say he lied under oath about the scheme during a deposition in January 2013, while he was a member of Congress.
The seat is getting a reputation as the "bad boy seat." Grimm was elected to replace Rep. Vito Fossella, a Republican who resigned in 2008 after a drunk driving arrest led to the revelation that he had a secret family.
ABC News' Shushannah Walshe and Josh Margolin contributed to this report