Gerard Terry to plead guilty to tax evasion, sources say

Former North Hempstead Democratic Party leader Gerard Terry is expected to plead guilty in federal court in Central Islip on Thursday to failing to pay $1.4 million in income taxes, according to several sources familiar with the case.

Terry was arrested in February by agents of the IRS Criminal Investigation Division and the FBI and was charged with one count of tax evasion and one count of obstructing the Internal Revenue Service, in a complex scheme to avoid paying taxes since 2000.

As part of a deal, Terry will plead guilty to the tax evasion charge, the sources said.

In addition to repaying the money he owes, Terry faces up to 5 years in prison and will probably get a sentence of between 30 and 36 months in prison, the sources said.

Terry’s attorney, Stephen Scaring of Garden City, declined to comment, as did John Marzulli, a spokesman for federal prosecutors in the Eastern District of New York.

Much of Terry’s income — according to court documents — came from public positions he held, including as a lawyer for the Democratic commissioner at the Nassau County Board of Elections; attorney for the North Hempstead Board of Zoning Appeals; counsel to the North Hempstead Town attorney; and as attorney for the Freeport Community Development Agency, the Roosevelt Library board and the Long Beach Housing Authority.

Eastern District prosecutor Artie McConnell has said Terry failed to pay his tax debt since 2000, despite earning over $250,000 a year.

At the time of his arrest, officials said, “Terry routinely failed to file personal . . . tax returns,” and when questioned by the IRS, he filed forms years late that contained false information and failed to report income accurately.

Also to prevent the IRS from seizing his assets, officials said, Terry cashed $500,000 worth of wages or compensation checks, rather than depositing them in a bank; deposited only a minimum amount of cash in bank accounts to cover regular expenses and luxury purchases; and created and used a checking account in the name of a fictitious person.

Terry has blamed his failure to pay taxes because of a “cascading series of serious” health problems.

Terry has pleaded guilty to a separate state tax case.

In September, Terry pleaded guilty in Nassau County Criminal Court to failing to file a 2010 state tax return for personal income and to not paying more than $3,000 in state taxes.

The judge in that case said he expected to impose a sentence of up to six months in jail and 5 years of probation. The state sentence would probably run concurrently with any federal sentence, officials with the district attorney’s office said at the time.

In January 2016, before officials publicly announced they were investigating him, Newsday reported that Terry had run up almost $1.4 million in tax debt.

By Robert E. Kessler

Robert.Kessler@newsday.com

Bob Kessler covers federal law, including law enforcement agencies such as the FBI, DEA, IRS and ATF, as well as the federal courts.