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Possible plea deal in Bergal Mitchell land fraud case upsets some Senecas

There was a time when Bergal Mitchell’s star rose almost as fast as the Seneca Nation’s casino fortunes.

He was a tribal councillor and second-in-command of the Nation’s growing casino empire.

Then came the allegation that Mitchell cheated his own people by siphoning off $800,000 from a Seneca Gaming land deal in Lewiston.

The allegation led to an FBI investigation and now, seven years later, Mitchell is faced with pleading guilty or going to trial in a case that divided the Seneca Nation and is still being watched carefully by its members.

Court records indicate Mitchell may be close to reaching a plea agreement – sources say it could keep him out of jail – and ending a high-profile federal prosecution that has already sent a well-known Buffalo lawyer to prison. Mitchell is scheduled to appear Monday in Buffalo federal court.

“If this happens, people will be demoralized,” a former Seneca tribal councillor said of the reports that Mitchell might not go to prison. “They’re hoping that finally, after all these years, there might be justice.”

At the heart of the government’s case is the claim that Mitchell and an accomplice orchestrated a 2006 real estate sale – the 250 acres is now the Hickory Stick Golf Course – that cost Seneca Gaming $2.1 million even though only $1.2 million went to the sellers. Authorities still have not accounted for the entire difference.

While the government’s prosecution of Mitchell wound its way through the court system – he was first indicted in early 2011 – his case has remained on the front burner of Seneca Nation politics and a major thorn in the side of former Seneca President Barry E. Snyder Sr.

Snyder, who was president and chairman of the gaming corporation when the land deal took place and was closely associated with Mitchell, has never been charged and has said in the past that, if Mitchell stole money, he had no knowledge of or involvement in the crime. Snyder, who is currently head of the Seneca Gaming Corp., declined to comment for this story.

When the grand jury indicted Mitchell, the news that a former Seneca Gaming official had been charged with theft, fraud and money laundering quickly became Topic A among Senecas across the region, in part because it was Mitchell and in part because of the allegation that he stole from the Nation’s casino corporation.

“It was kind of like catching the fox in the hen house,” said another former tribal councillor. “It raised a lot of eyebrows. Bergal Mitchell was supposed to be a trusted official of the Seneca people.”

The Senecas who talked to The Buffalo News about Mitchell’s potential plea said they have friends and family who work for the Nation or at the casinos and spoke only on the condition they not be named. Many of them are also members of Snyder’s political opposition.

As recently as the fall of last year, in the midst of the race for Seneca president won by Maurice A. “Moe” John, opponents of Snyder’s Seneca Party sent out a newsletter reminding Senecas of the Mitchell prosecution and his past ties to Snyder.

“When people are placed in a position of trust and steal from the Nation, they should be prosecuted to the fullest extent of the law for taking advantage of the Seneca people,” the newsletter said.

There’s no indication in the court record what type of plea agreement Paul J. Cambria Jr., Mitchell’s lawyer, may be trying to negotiate with prosecutors. Both he and Assistant U.S. Attorney Anthony M. Bruce, the lead prosecutor in the case, declined to comment.

U.S. Attorney William J. Hochul Jr., because of political contributions from the Nation to his wife, Lt. Gov. Kathleen C. Hochul, has recused himself from the case,

Sources close to the prosecution say Mitchell may end up pleading guilty to a lesser charge of making a false statement. They said he could also repay the $338,000 he’s accused of stealing as part of a separate judgement and therefore allow for the possibility of a nonprison sentence by U.S. District Judge Richard J. Arcara.

The 13-count indictment against Mitchell accuses him of pocketing $248,000 for himself and another $90,000 for his wife, Rachel, a lawyer.

When the reports of a possible plea deal by Mitchell started spreading last year, the Seneca Tribal Council sent a letter to Hochul recommending against a plea deal, sources said. One of the people who signed that letter said a plea is still a bad idea, even a year later.

“It’s a win for Bergal Mitchell. It’s a win for Barry Snyder. And it’s a win for the federal government,” he said. “But it’s a loss for the Seneca people.”

The FBI is not the only one claiming Mitchell was involved in the alleged land fraud in Lewiston.

Timothy J. Toohey, a well known Democratic Party insider and a former Seneca Gaming lawyer, admitted stealing hundreds of thousands of dollars from the company as part of his plea deal. He also named Mitchell as his accomplice.

Toohey, who was Snyder’s lawyer, said he and Mitchell split $540,000 as part of “an unlawful agreement” tied to the real estate sale. His share was $202,000.

Sentenced in 2012 to 33 months in prison, Toohey is expected to testify if Mitchell’s case goes to trial.

One of the legal defenses Mitchell put forth in the wake of his indictment is the role of the U.S. Attorney’s Office in prosecuting crimes involving members of a sovereign nation. It’s also no secret that many Senecas have an inherent distrust of the government, state and federal, and view Mitchell’s prosecution as one more unwelcome intrusion into Seneca society and government.

The judges overseeing Mitchell’s case have consistently ruled that federal prosecutors do have jurisdiction over this type of crime.

Mitchell, in turn, filed his own civil suit in federal court when Nation officials stripped him of his annuity payments and business licenses after his indictment. In that case, the courts ruled that they do not have jurisdiction over the Nation.

Meanwhile, Hickory Stick, a $25 million championship golf course, opened to the public in June 2010.