NEW YORK (CBSNewYork/AP) – U.S. Rep. Michael Grimm of New York City plans to plead guilty to a federal tax evasion charge rather than go to trial next month, people familiar with plea negotiations said Monday.

A hearing is scheduled for Tuesday in federal court in Brooklyn, where the Staten Island Republican is expected to enter the plea in a case stemming from an investigation of his campaign financing.

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Lawyers for Grimm and federal prosecutors declined to comment on a pending plea deal. But the two people familiar with the case told The Associated Press on Monday that the politician planned to plead guilty to a single count of aiding in the filing of a false tax return in hopes of giving himself better odds at avoiding prison time than if he had been found guilty at trial.

The people weren’t authorized to discuss the plea deal and spoke on condition of anonymity.

An indictment against Grimm alleged the tax fraud began in 2007 after he retired from the FBI and began investing in a Manhattan eatery called Healthalicious. It accused him of underreporting more than $1 million in wages and receipts to evade payroll, income and sales taxes, in part by paying immigrant workers, some of them in the country illegally, in cash.

Grimm, who’s free on $400,000 bond, won re-election in November while fighting the charges. It was unclear whether he would be allowed to keep his seat.

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Asked at an October debate whether he would resign if found guilty, he responded, “Certainly, if I was not able to serve, then of course I would step aside and there would be a special election.”

There was no response to a phone message left Monday at Grimm’s office.

Grimm, 44, made headlines in January after telling a local cable TV news station reporter he wanted to throw him off a balcony in the Capitol for asking about the campaign finance inquiry.

The lawmaker was never charged with fundraising fraud. But as WCBS 880’s Marla Diamond reported, a Texas woman romantically linked to him, Diana Durand, pleaded guilty in September to charges she lined up straw donors for his 2010 campaign.

Durand admitted she had asked “two friends” to make $12,000 contributions to Grimm and another politician and then secretly reimbursed them as a way to circumvent campaign contribution limits. She denied through her attorney that Grimm knew anything about it.

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