The Village of Manorhaven appears to be one of the entities that federal prosecutors say helped Gerard Terry, the indicted North Shore political leader, shield his income from federal tax authorities, according to village records.
The records suggest the village paid Terry, the former North Hempstead Democratic Committee chairman, 16 checks worth $76,733 for his work as village attorney in 2010, matching the dollar amount and number of checks that federal court filings say were paid by a “Municipality #2.”
Municipality #2 did not file IRS Form 1099, a tax form showing income for independent contractors, for Terry for the 2010 tax year and “claimed he performed no work” that year, despite paying him and letting him continue to work for the village, according to a Jan. 31 letter from U.S. Attorney Artie McConnell to a judge.
The letter also says Terry “explicitly instructed subordinate employees at Municipality #2” not to open mail from the IRS.
In response to a Freedom of Information request, Manorhaven provided Forms 1099 only for the tax years 2009 and 2011. The records were sent to Blank Slate Media last Tuesday.
The form for 2010, along with those for 2008 and 2012, were absent, despite village records showing payments to Terry in those years.
Government entities are subject to a fine — $260 per return as of January 2016 — for each Form 1099 they fail to file, according to the IRS website. The fine is higher if “intentional disregard” for IRS law can be proven.
Terry, 63, of East Hills, has pleaded not guilty in federal court to charges of tax evasion and the obstruction of the Internal Revenue Service for allegedly failing to file on-time income tax returns since 2000 and lying about his income on returns he filed late.
He worked for at least Nassau County municipalities, including Manorhaven, the Town of North Hempstead and the Village of Port Washington North.
Manorhaven officials said Jonathan P. Fielding, the village clerk-treasurer at the time, would have been responsible for handling Terry’s checks and tax forms in 2010.
Fielding also worked with Terry as the secretary to the Town of North Hempstead Board of Zoning Appeals, and helped create a limited liability company that Terry allegedly used to hide income from tax collectors.
Municipality #2 is among three entities that allegedly played a role in concealing his income and otherwise evading tax collectors, according to McConnell’s letter. The other two are private companies, identified in the letter as “Law Firm #1” and “Company #1.”
This apparent connection with Manorhaven sheds more light on the help Terry allegedly received in hiding his tax debt exceeding $1 million, which he accumulated despite making more than $200,000 a year as a municipal attorney.
John Marzulli, a spokesman for the U.S. attorney’s office for New York’s Eastern District, said he could not confirm or deny whether Manorhaven is Municipality #2.
Donald Badaczewski, the village justice court clerk, said Terry’s Form 1099 for 2010 could have been destroyed in a fire at a Brooklyn warehouse where the village stored records or otherwise lost by a previous administration.
“The village feels strongly that they did send a 1099 and that it was lost in the fire in Brooklyn,” village Mayor Jim Avena said.
Trustee Rita DiLucia, who was on the village Board of Trustees in 2010, said she had no knowledge of whether the village issued Terry a 1099 or not that year, intentionally or otherwise.
Fielding could not be reached for comment. But Avena described him as “one of the finest, most honest men I’ve ever met” and said he would never intentionally withhold a Form 1099.
Avena denied that the village was complicit in Terry’s alleged tax evasion. He highly doubts that Manorhaven officials were those whom Terry told not to open IRS mail, he said, as Terry was not in the village office on a daily basis.
“Based upon the circumstance and the people involved, I would absolutely find it extraordinary that I was wrong on this one,” Avena said.
Terry declined to comment for this story, as did his attorney, Stephen P. Scaring.
Terry has also pleaded not guilty to eight charges of tax fraud brought in New York State courts. He is next due in federal court on June 16 and in state court on June 23.
McConnell’s Jan. 31 letter asked U.S. District Court Judge Joanna Seybert to detain Terry until his trial. Seybert denied the request. Terry was released on bail and first confined to his home, but was later allowed to leave.
A listing of Manorhaven’s payments to Terry shows 15 checks with dates in 2010 totaling $73,533. But a 16th for $3,200, dated Jan. 1, 2011, brings the total amount to $76,733.
Badaczewski said it is possible that the Jan. 1, 2011, check was actually paid in late 2010. The 25 other payments to Terry in 2011 total $80,000, matching the amount on his Form 1099 for that year.
Terry allegedly cashed the checks at the bank where they were drawn to prevent the IRS from garnishing his wages, according to McConnell’s letter.
Sharon Natalie Abramski, the current village clerk, said she had no knowledge of whether Manorhaven was Municipality #2 as described in McConnell’s letter.
Asked whether she thought it was possible, Abramski said, “I would not speculate. That would be silly for me to do. I don’t know how they did things. … I’ve only been the clerk since last July, so I’ve kind of revamped things.”
Records that other municipalities for which Terry worked provided in response to Freedom of Information requests do not match the description of Municipality #2.
The Village of Port Washington North paid Terry $14,643.75 in 2011 and 2012, according to Forms 1099 and village financial records. The Long Beach Housing Authority only employed him as a consultant in 2015, paying him $12,000.
Terry was on the Nassau County payroll as an employee for the Nassau Board of Elections, and the county did not issue him any Forms 1099, Sergio A. Blanco, a deputy county comptroller, said in an email.
Blank Slate Media’s requests to the Freeport Community Development Agency, the Roosevelt Public Library and the Town of North Hempstead are still pending.
Terry also did work for the North Hempstead Housing Authority, federal prosecutors said in a January news release. But Sean T. Rainey, the authority’s executive director, said Terry never worked for the authority.
Terry has blamed his tax debt on “Type-A workaholic compulsion with self-denial and truly catastrophic health issues.” Scaring told Seybert in a February letter that the allegations against him have left his family with little income.
Terry is also under investigation for his role in bid-rigging and procurement fraud schemes in Nassau County, according to McConnell’s Jan. 31 letter. He has not been charged with any crimes related to that investigation.
Manorhaven received two separate federal subpoenas in 2007 and 2016 seeking records related to Terry. The village received a separate subpoena in 2015 for records relating to contracts with eight village vendors.