Former Attorney Pleads Guilty to Stealing Money from Seneca Nation of Indians

BUFFALO, NY—Timothy Toohey, age 62, of Lewiston, NY, pleaded guilty before U.S. District Judge Richard J. Arcara, to a two-count felony information charging him with stealing money from an Indian tribal organization, in violation of Title 18, United States Code, Section 1163, and filing a false tax return, in violation of Title 26, United States Code, Section 7206(1), U.S. Attorney Kathleen M. Mehltretter of the Western District of New York announced today. The theft offense carries a maximum penalty of a term of imprisonment of five years, a fine of $250,000, or both, while the tax offense carries a maximum penalty of a term of imprisonment of three years, and a fine of $100,000, or both.

Assistant U.S. Attorney James P. Kennedy, Jr., who handled the case, stated that the defendant's convictions arose as a result of the disbarred attorney's involvement in an effort to build a golf course in the Town of Lewiston. According to Kennedy, in April of 2002, Old Creek Development (OCD), 920 Center Street, Lewiston, New York, was formed as a Limited Liability Corporation (LLC) by Michael Dowd, Esq. Dowd was partners in OCD with Charles Boos and Joseph Deck, who together owned vacant land in the Town of Lewiston. The primary reason that the LLC was formed was to develop a golf course on the land owned by Boos and Deck. While OCD initially sought to enter into an agreement with the Town of Lewiston to develop a municipal golf course, that effort did not succeed. At that point, defendant Toohey decided to become involved by offering to bring together OCD (as seller) and the Seneca Nation of Indians (SNI)(as the purchaser) of the golf course site. To that end, defendant Toohey contacted, inter alia, both Michael Dowd (who was acting on behalf of OCD) and Bergal Mitchell, who was then the Vice Chairman of the Seneca Gaming Corporation (SGC) Board of Directors. The SGC is an entity which is wholly-owned by the SNI. On or about February 19, 2005, the Tribal Council of the SNI passed a resolution related to the purchase of the land in Lewiston, New York for a golf course. That resolution authorized the Seneca Niagara Falls Gaming Corp. (SNFGC), an entity wholly owned by the SGC, to acquire the land for the golf course for a purchase price which was "not to exceed $2.1 million."

As part of his plea, Toohey admitted that during the course of the negotiations leading up to the sale of the property from OCD to the SNFGC, he and Bergal Mitchell entered into an unlawful agreement whereby each would, unbeknownst to SNI, receive a portion of the sale proceeds received by OCD from SNI. Both defendant Toohey and Bergal Mitchell knew that neither the SNI Tribal Council, the SGC, nor the SNFGC, had knowledge that anyone other than the persons selling the land (OCD) were going to receive any portion of the sale proceeds. Toohey further admitted that both he and Bergal Mitchell undertook affirmative measures to conceal from members of the SNI Tribal Council, SGC and/or the SNFGC their interest in the transaction, including the fact that they were each personally going to receive a portion the sale proceeds.

According to Kennedy, the investigation revealed that after paying its expenses, OCD, on February 15, 2006, paid a total of roughly $1,400,000 for the six (6) total parcels it obtained from the Booses, Deck, and the Town of Lewiston. On that same day, OCD conveyed title to the six (6) parcels it had obtained from the Booses, Deck, and the Town of Lewiston to the SNFGC in exchange for $2,100,000. Of the sales proceeds received by OCD, defendant Toohey, during 2006, received approximately $202,000, while Bergal Mitchell received approximately $248,000. In addition, Bergal Mitchell's wife, Rachel Mitchell, received an additional $90,000. In addition, Toohey's failure to report the $202,000 he received from the proceeds of the land sale from OCD to SNFGC as income was a material omission to his 2006 tax return.

The plea was the culmination of an investigation on the part of Special Agents of the Buffalo Division of the Federal Bureau of Investigation, under the direction of, Special Agent-in-Charge James H. Robertson, and the Internal Revenue Service, Criminal Investigation Division, under the direction of Supervisory Special Agent Shaun P. Healy.

Sentencing is scheduled for April 14, 2010, at 1:00 p.m. EST, in Buffalo, N.Y., in front of U.S. District Judge Richard. J. Arcara.