Prosecutors are calling for a prison sentence of four and half years for former North Hempstead Town Democratic chairman Gerard Terry, who admitted he failed to pay nearly $1 million in federal income taxes.
In a court filing Tuesday, federal prosecutors said Terry intentionally avoided paying taxes from 2000 to 2015 by engaging in sophisticated schemes that included enlisting others — including government workers, a law firm, and a business — to help him.
A substantial punishment, prosecutors said, would discourage others in positions of power from breaking the law.
“Those, who, like Terry, violate the public trust and seek to use their position and influence to enrich themselves must be punished severely to deter future wrongdoing,” Assistant United States Attorney Artie McConnell said in the sentencing memorandum sent to U.S. District Court Judge Joanna Seybert in Central Islip. “This case presents a unique opportunity for this Court to do just that.
Terry, 63, of Roslyn Heights, pleaded guilty on Oct. 12, 2017 to one count of tax evasion. In exchange for his plea, prosecutors dropped an obstruction charge against him. He is scheduled to appear before Seybert on March 29 for sentencing.
In a separate case, Terry also pleaded guilty to a state tax-fraud charge. He’s also awaiting sentencing in that case.
Reached by phone on Wednesday, Terry declined to comment, and referred questions to his attorney, Stephen Scaring of Garden City.
Scaring said he is baffled by prosecutors’ recommendation for such “harsh” punishment, which he said is typically “never” seen in tax evasion crimes.
“This is a straight forward tax case,” Scaring said in an interview. “He’s not charged with any kind of political corruption.”
Scaring said he also submitted a sentencing memorandum to Seybert, but asked the judge to bar the public from viewing the document because it contains “sensitive” information.
Scaring said he asked Seybert to sentence Terry to probation. More than 100 people who know Terry have submitted letters to the judge, telling her why they believe Terry deserves leniency, according to Scaring.
During the 15 years that prosecutors said Terry failed to pay nearly any of his federal income taxes, he earned about $250,000 annually working for various public entities, including the Nassau County Board of Elections, the Long Beach Housing Authority, the Hempstead Housing Authority, the Freeport Community Development Agency, the Roosevelt Library, the Village of Port Washington North, the Village of Manorhaven, and the Community Development Corporation of Long Island.
Terry used many schemes to hide his incomes from the Internal Revenue Service and went to great length to avoid paying his share of the federal income taxes, according to prosecutors.
In one instance, they said, Terry opened a bank account in the name of Neville Warwick, L.L.C. and listed a second person — an attorney and former Town of North Hempstead zoning board official — as the recipient of the correspondence.
Between September 2010 and November 2014, about $16,000 in total deposits were made to the account, and prosecutors said the money was used to pay Terry’s personal expenses, including payments to BMW and AT&T.
“Analysis of the activity in this account revealed that it had no legitimate business purpose and was merely a shell entity designed to disguise Terry as the owner and user of the account to further thwart IRS collection efforts,” McConnell said.
Prosecutors also asked the court to force Terry to pay a total of $1,375,975 million in restitution, $992,057 of that are federal income taxes Terry owed, and the remainder $383,918 in penalties and interests.
At the time of Terry’s arrest in February 2017, prosecutors said he was “being investigated for his role in kickback, bid rigging and other procurement fraud schemes in Nassau County.”
On Wednesday, a spokesman for the U.S. Attorney’s Office for the Eastern District said he had no comment regarding whether or not Terry remains under investigation.