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Supporter of Pigeon’s political group paid $1.4 million to settle two contraband cigarette cases

One of the top donors to the political action committee run by G. Steven Pigeon is a Seneca Nation businessman who took a corporate guilty plea to felony crimes in Missouri last year. Aaron J. Pierce admitted that one of his companies illegally bought and sold contraband cigarettes and agreed to pay $1 million in fines, forfeitures and judgements.

In April of this year, Pierce forfeited another $400,000 to settle a different case involving contraband cigarettes in Buffalo’s federal court.

Government records show that one of Pierce’s companies was the third-largest financial supporter of the WNY Progressive Caucus, a political action committee formed by Pigeon, whose fundraising activities are now under investigation by state and federal authorities.

In September 2013 – less than a month after one of his companies had been charged criminally in the Missouri case – another of Pierce’s companies donated $30,000 to the Pigeon PAC.

Pierce, 44, who ran unsuccessfully for Seneca Nation president in 2012 and also runs an ammunition company, has nothing to hide and did nothing inappropriate in donating money to Pigeon’s organization, his attorney told The Buffalo News on Monday.

“There have been no questions, no allegations about it of any kind,” said the attorney, Edward A. Betz. He said his client has not been contacted by anyone involved in the Pigeon probe. Betz said he “could not speculate” whether investigators will ever want to question Pierce about the donations in the future.

Two sources close to the probe said investigators are looking into Pigeon’s handling of donations from Pierce, in addition to his handling of donations made by others to the political committee.

Damien LaVera, chief spokesman for State Attorney General Eric T. Schneiderman, said he could not discuss specifics of the case, which is being handled by the Attorney General’s Office, federal prosecutors, State Police and the FBI. “It is an ongoing investigation,” LaVera said.

The case made local headlines Thursday, as investigators conducted court-authorized searches on the homes of Pigeon and two political associates, Christopher M. Grant, chief of staff to U.S. Rep. Chris Collins, R-Clarence; and Steven M. Casey, Buffalo’s former deputy mayor.

Dennis C. Vacco, who represents Pigeon with co-counsel Paul J. Cambria, said Monday that he is aware of Pierce’s donations and said they are a matter of public record. “As I said last week, all the contributions that were made to the caucus were lawful contributions,” Vacco said Monday. “All of them.”

Pigeon, a former chairman of the Erie County Democratic committee, has been at war for years with the committee’s current leadership. In 2013, Pigeon’s political action committee raised $267,000 for opponents of primary candidates backed by Erie County Democratic headquarters.

In recent years, Pigeon also has become active as a registered lobbyist for the Seneca Nation.

For several years, Pierce has been one of the leaders of the Seneca Nation’s efforts to eliminate government control and taxation of cigarette sales by Seneca vendors.

According to federal court documents obtained by The News, Pierce’s tobacco-related companies had two expensive run-ins with law enforcement in the past two years.

• In August 2013, a Pierce company called AJ’s Candy & Tobacco was charged – with 17 other defendants – with conspiracy to commit wire fraud and contraband cigarette trafficking. Federal prosecutors said AJ’s Candy was one of several Native American tobacco companies from Western New York that saved hundreds of thousands of dollars by illegally buying and reselling “unstamped” cigarettes.

AJ’s Candy and other companies saved themselves $4.35 a pack by illegally buying cigarettes from a Missouri company that had not paid New York State excise taxes, prosecutors charged.

Court papers show that, last August, AJ’s Candy & Tobacco was sentenced after taking a corporate guilty plea, admitting to felony charges of conspiracy to commit wire fraud and contraband cigarette trafficking. The company agreed to pay just over $1 million in fines, judgments and restitution. The company was put on probation for two years. Pierce – who signed the plea agreement on the company’s behalf – agreed that the company would not sell any cigarettes except those made by his own companies for two years.

The charges against AJ’s Candy & Tobacco and 17 other defendants followed a lengthy undercover investigation by the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives. The defendants in the case purchased a total of $17 million in illegally untaxed cigarettes during the undercover probe, said U.S. Attorney Tammy Dickenson, in Kansas City, Mo.

• In April of this year, Pierce and another of his companies – AJ’s Wholesale LLC of Irving – agreed to pay $400,000 to federal prosecutors in Buffalo to settle a noncriminal forfeiture case.

Federal prosecutors filed the forfeiture action against Pierce and AJ’s Wholesale in February, after ATF agents determined that AJ’s unlawfully bought and resold more than 403,000 cartons of untaxed cigarettes between September 2012 and January 2013, Assistant U.S. Attorney Richard D. Kaufman said in court papers.

A court order directing Pierce and AJ’s Wholesale to pay $400,000 to the federal government was signed by District Judge Richard J. Arcara on April 19. Another document, called a “stipulation for settlement and forfeiture,” was signed by Pierce and Pigeon – acting as an attorney for Pierce – on March 24.

AJ’s Wholesale, the company involved in the $400,000 forfeiture action, is the same Pierce company that donated $30,000 to Pigeon’s PAC in September 2013, government documents show.

There is nothing in state law that bars a political action committee from accepting donations from a corporation that has pleaded guilty to criminal charges or paid money to settle a forfeiture action in the courts, one law enforcement official said.

Pierce, through his attorney, declined to comment.

News Staff Reporter Susan Schulman contributed to this report. email: dherbeck@buffnews.com