FBI looks at Snyder in land fraud case
Published: January 10, 2010, 6:46 am
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A former attorney for Barry E. Snyder Sr., the powerful president of the Seneca Nation of Indians, admitted Friday that he embezzled $202,000 from the Senecas in a land fraud case involving the Senecas' Hickory Stick Golf Course.
The federal court plea from disbarred lawyer Timothy J. Toohey is expected to be followed by charges against Bergal Mitchell III, Snyder's former vice chairman of the Seneca Gaming Corp., according to Mitchell's attorneys. Mitchell and his wife were paid nearly $350,000 in the alleged land fraud.
And FBI agents named Snyder as one of a dozen people they were seeking information about when they raided the law offices of Lewiston attorney Michael J. Dowd, who put the land deal together.
Is Snyder, for decades the most powerful businessman and office holder in the Seneca Nation, also a target of the ongoing federal investigation?
Prosecutors and FBI agents decline to say whether Snyder or anyone else will be charged in the case, but court documents obtained by The Buffalo News last week indicate that Snyder is under investigation.
"People need to know, if you're a member of an Indian nation, you're not insulated from prosecution if you embezzle money or receive goods that are stolen from the Indian nation," said James H. Robertson, special agent in charge of the Buffalo FBI office.
Snyder declined to comment on the federal court case through a public relations agency spokeswoman.
FBI agents said in a search warrant application that Mitchell was Snyder's "backroom wheeler dealer," who handles Snyder's "dirty work."
They also quote Dowd as saying the price of the Lewiston land deal had to be inflated because Snyder needed money to buy votes in a Seneca Nation election.
Snyder was not up for election that year, but he was a supporter at the time of Maurice John Sr., who was elected president. Paying people for their votes is a long-standing practice that is legal under Seneca Nation law.
Robertson and James P. Kennedy, chief of criminal prosecutions in the U.S. Attorney's Office, declined to comment on statements made in court papers about Snyder or anyone else.
The case involves the $2.1 million the Seneca Nation paid for 200 acres of land in Lewiston for Hickory Stick, or nearly $900,000 more than the two landowners received for the property.
Seneca officials said they were surprised to learn from the FBI in September 2008 about the additional money that was siphoned from the land deal, and the Seneca Nation Tribal Council pledged its cooperation.
The Tribal Council voted Saturday to banish Toohey from all its territories and business enterprises.
"The Seneca Nation's Council believes Mr. Toohey and his activities pose a direct threat to the integrity, economic security and health and welfare of the Nation and its citizens," Snyder said in a prepared statement.
Toohey pleaded guilty to two felonies in federal court on Friday. He admitted that he embezzled the $202,000 from the Senecas in their purchase of land for the golf course in Lewiston, and he admitted failing to declare the income on his tax return.
Toohey implicated Mitchell, Snyder's top aide in the Seneca Gaming Corp. at the time of the land purchase, and Mitchell's lawyers anticipate he too will be charged with taking more than $330,000 in the same land deal.
Snyder was the chairman of the Seneca Gaming Corp. — and Mitchell his vice chairman — when the Lewiston land deal was arranged and signed in February 2006.
The Senecas agreed to pay Dowd and his Old Creek Development $2.1 million for land to build the Senecas' Hickory Stick Golf Course.
But the two landowners — Charles Boos and Joseph Deck — whose property Dowd put together were only paid $1.2 million. Boos complained to Dowd after he read about how much Dowd was paid.
"Dowd told Boos the [Senecas] paid $2.1 million, but Barry Snyder, then president of the [Seneca Nation], needed money to pay for votes for his re-election," FBI Agent Robert Gross said in the search warrant application.
Dowd told Boos that Snyder needed to pay $300 a vote in the coming election, the agent added.
Boos then went to the FBI, and agents began an investigation.
Mitchell resigned from his position in the gaming corporation in 2008 after learning that the FBI was investigating the land deal.
After refusing to cooperate with Seneca gaming auditors investigating the deal, Snyder was ousted from the chairmanship last year by other members of the gaming corporation's board of directors. He remains the Seneca Nation president.
In courtroom discussions, prosecutor Kennedy said Toohey could face anywhere from 21 months to 47 months in prison if U.S. District Judge Richard J. Arcara follows advisory sentencing guidelines. Arcara scheduled sentencing for April 14.
As a condition of his plea deal, Toohey is cooperating with federal agents, Kennedy said.
Dowd, according to the court papers, paid himself $236,000 for his work in the land deal. He was named the Lewiston town attorney last week.
"Certain monies were received by Mr. Toohey, Mr. Mitchell and others," Kennedy told Arcara in court.
"There are other people involved in this?" Arcara asked.
"That's the government's belief," Kennedy said.
"Are there [more] cases pending?" the judge asked.
"Not yet," Kennedy said.
An attorney for Mitchell, Joseph V. Sedita, attended the court proceeding and said later that it appears that federal prosecutors are building a case against his client.
But in Sedita's view, there was nothing improper about the land sale.
"The Senecas are supposed to be the victims in this case, but the Senecas and their lawyers knew what price was being paid for the property," Sedita said. "I don't see where there was a crime."
Asked about the allegation that Mitchell does "dirty work" for Snyder, Sedita scoffed.
"That sounds to me like a comment from a political foe or foes of Barry Snyder," Sedita said.
In court papers, Kennedy said both Toohey and Mitchell knew that the Seneca Gaming Corp. was unaware that they were "personally going to receive a portion of the sale proceeds."
Dowd, who was a partner with Boos and Deck in the land deal, broke no laws and has cooperated "completely and voluntarily" in the investigation, said his attorney, Rodney O. Personius.
"The decision is up to the U.S. Attorney, but it's our firm view that Mr. Dowd should not be charged in this case," Personius said.
Efforts to reach Rachel Mitchell, an attorney who got $90,000 from the land deal, at her Gowanda law office were unsuccessful.
Bergal Mitchell, who has been involved in a number of tobacco businesses, is a former member of the Seneca Nation's main governing body, the Tribal Council.
He also was vice chairman of the Seneca Diabetes Foundation, the philanthropy which Snyder serves as chairman.
Toohey, according to the search warrant application, used at least $100,000 of the embezzled money to repay a foundation in a case that led to his earlier imprisonment for tax fraud.
dherbeck@buffnews.com and mbeebe@buffnews.com
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