Gerard Terry, North Hempstead’s former Democratic Party chairman, pleaded not guilty to one count of criminal tax fraud dating to 2010 for not filing a New York State personal income tax return, according to prosecutors.
The Nassau district attorney’s office moved in the case following Newsday reporter Scott Eidler’s stories about Terry’s failure to pay more than a million dollars in state and federal income taxes, despite holding six public jobs.
But the issues arising from the case go beyond Terry’s tax problems. They, once again, highlight the benefits of being a politically powerful person on Long Island.
In Terry’s case, the Town of North Hempstead ignored a 25-year-old law that would have required that Terry divulge his debts years earlier.
Terry’s tax liability on more than $250,000 in income in 2010, was $13,000. But, as Terry acknowledged in a statement sent over a news release wire on Jan. 21, he owed state and federal taxes from other years as well.
“I owe back taxes to the IRS,” according to the statement. “A lot of back taxes.” He went on to say he was working with the Internal Revenue Service to make things right, “and then I need to tackle my New York State arrears.”
In the statement, Terry made one point that would be echoed after his arrest on Tuesday by District Attorney Madeline Singas.
“ ... Much of my law practice has been focused on serving public sector clients,” Terry wrote. “So the taxpayers have been paying legal fees to me and, in turn, my own tax obligations have not been met — not something anyone should be proud of.”
Terry, an attorney who works out of his home, last year earned $217,000 from six government positions controlled by Democratic Party officials or located in party enclaves.
Before 2009, failing to file state income taxes was a crime only if the taxpayer failed to file 3 years in a row and had tax liabilities in each of those years.
Now, failing to file in any single year — where there is a tax liability — is a crime. Meanwhile, the DA’s office left open the possibility of more charges.
“My office regularly prosecutes tax cheats in partnership with other authorities, a crime made worse when taxes are owned on income made from the public,” Singas said Wednesday in a statement. “This case underscores the need for greater oversight and transparency to ensure that contracts and government jobs go only to those worthy of the public’s trust.”
North Hempstead, for more than two decades, failed to enforce a law which would have mandated that Terry, as a political leader, disclose his debts. That changed recently, when the town expanded who was covered under the disclosure law, as part of a series of reforms.
The town moved only after Newsday publicized Terry’s tax issues, and his six public jobs — five of which he no longer holds.
But that doesn’t mean Terry’s lost his clout.
After an appearance on the tax fraud charge Tuesday, Terry was led away from the public area of the courthouse in Hempstead — where reporters and cameras were waiting.
Yesterday, a spokesman for the Nassau County Sheriff’s Department said the agency was investigating “misconduct” involving department employees who escorted Terry.
Among those under investigation, according to sources, is Corrections Sgt. James McCann, who denies helping Terry.
McCann’s wife, Helen, has pleaded not guilty to charges of embezzling more than $98,000 from North Hempstead’s Solid Waste Management Authority.