Did former North Hempstead Democratic political leader Gerard Terry, who has pleaded not guilty to two federal tax-evasion-related charges, receive help from some of his many employers in attempting to hide income from the Internal Revenue Service?
A letter attached to Terry’s indictment last week in a scheme to avoid paying more than $1.4 million in taxes since 2000 also includes allegations that a municipality, a law firm and a “company” did just that. None of them were identified in the indictment or during Terry’s arraignment.
In addition, the letter states that a federal investigation into Terry’s activities has extended into “his role in kickback, bid rigging and other procurement fraud schemes in Nassau County.”
Those investigations are ongoing — as are an astonishing number of other investigations by the federal government into alleged corruption-related activities in Nassau and Suffolk.
During Terry’s arraignment in Central Islip last week, the U.S. Attorney’s Office for the Eastern District of New York took the unusual step of asking U.S. District Court Judge Joanna Seybert to deny Terry bond as a flight risk and a danger to the community.
Seybert, noting the rarity of detaining defendants on tax-related charges, released Terry, 62, on bond — and on condition that he be confined to his home, monitored by an electronic bracelet.
According to the letter, “Terry has manipulated and enlisted others in his obstructionist practices.”
At the unnamed “Municipality #2,” for example, Terry instructed subordinate employees “to not open any mailed correspondence from the IRS,” the letter said.
Meanwhile, some of Terry’s employers — which, according to the letter, numbered at least 10 — “conspicuously failed to file Forms 1099, despite paying Terry.” Employers distribute Form 1099 — which started hitting inboxes, mail and web, over the past few weeks in preparation Tax Day 2017 — to employees as proof of income earned the previous year.
The letter singled out one employer, “Law Firm #1,” that failed for three consecutive years to issue Form 1099 to Terry, although he earned more than $30,000 from the firm during that time. “The fact that Terry simlarily failed to report income [over the same period] ... suggests that Law Firm #1’s failure to file the requisite forms ... was intentional and part of a concerted effort to enable Terry to hide income from the IRS,” the letter said.
Municipality #2 took it one step further by failing to file the form for 2010 and claiming that Terry performed no work that year — “despite issuing him over $70,000 in checks and allowing him to resume his position in subsequent years,” the letter said.
As for Company #1, the letter alleges, the firm paid Terry’s personal expenses directly, rather than issuing him a paycheck. One credit-card payment, the letter said, “reflects a collusive effort to obtain income in [a] manner that would not be readily visible to the IRS.”
According to prosecutors, the accusations amount to a tangle of deception by Terry, whose income tax troubles, despite six public positions that bought him $217,000 in 2015, first were detailed in a series of Newsday reports. Back then, Terry, , of Roslyn Heights, attributed federal and state income tax delinquencies to a “cascading series of serious health issues.”
But during arraignment on the federal charges, Assistant U.S. Attorney Artie McConnell said Terry had engaged in a “calculated pattern” of behavior for 15 years to avoid paying federal income taxes — despite earning at least $200,000 a year, most of it from work funded by taxpayers.
“This really is more than simply a case of someone not paying their taxes,” he said.
Terry, if convicted, could face as much as 51 months in prison.