Donald John owned All-American Tobacco, an Internet smoke shop based in Salamanca that illegally sold millions of dollars of tax-free cigarettes to New Jersey businesses.
After the feds caught up with the operation, he was ordered to pay $2.4 million in restitution to New Jersey, forfeit $250,000 to the federal government and wear an ankle bracelet.
If that sounds harsh, consider that the manager of his smoke shop, Rita Roosa, was sentenced to nine months in prison. And she was just doing what John told her to do, according to her defense attorney and her husband.
"Donald John teaches her the business, he gives her the orders, he makes most of the money, and Rita Roosa is the one who goes to prison," said Thomas Eoannou, her defense lawyer. "There is absolutely no way that should have happened."
Eoannou doesn't think it is any coincidence that the leniency was shown to Donald John because he is a member of the Seneca Nation's Tribal Council, the Indian tribe's highest governing body. Or that he is a former Cattaraugus County sheriff's deputy. Or that he agreed to act as a government informant.
After looking at the discrepancy between what John received and what Roosa received, Eoannou called it all "one of the worst travesties I've ever seen in 31 years as a lawyer."
Paul Cambria, who represents Roosa's husband, Joseph, also thinks the feds cut John a break because he was a police officer, agreed to act as an informant and is a high-ranking Seneca Nation official.
A criminal case against Joseph Roosa was dropped for lack of evidence, said Cambria, but he had to turn over $2.5 million in business properties to the federal government as a partial settlement of a $3.9 million restitution case against his wife.
"My complaint is not with Donald John, or the Seneca Nation," Joseph Roosa said in a recent interview. "My complaint is with the federal agents and prosecutors who made my wife the main target in this case ... She only did what Donald John and his wife told her to do."
John, meanwhile, is paying New Jersey nearly $2.4 million in restitution, according to court documents - but at the rate of $200 a month. It would take him almost 990 years to complete those payments.
John, 45, a well-known Seneca leader who has served on the Tribal Council since at least 2005, did not respond to four telephone messages and a letter sent to his home by The Buffalo News. His attorney, Henry E. Klingeman, told The News he had nothing to say about the case. Klingeman declined to comment on a detailed list of questions that a reporter emailed to him at his law office in Newark, N.J.
A spokesman for the federal prosecutors who handled the case - the U.S. Attorney's Office in New Jersey - declined to comment on any questions about why prosecutors decided to target Rita Roosa, 49. A New Jersey spokesman for the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives also declined to comment.
Although John escaped a prison cell, his legal troubles could cost him his elected post with the Senecas. Seneca sources said a tribe member who attended a July 14 Tribal Council meeting raised questions about whether a convicted felon can continue to hold one of the tribe's highest offices. Council members make $95,000 a year, according to sources familiar with Seneca government.
The Senecas' general counsel, Christopher Karns, later issued a legal opinion that John, as a convicted felon, should no longer be allowed to hold office in the council.
And on July 27, The News learned, council Chairman Richard E. Nephew sent John a letter asking him to step down from the council. If John refuses, Nephew told him, he could face an impeachment proceeding.
"This is an unfortunate situation for Councillor John and the Seneca Nation. But I have heard from many Senecas who, like me, are upset that there is a convicted felon sitting on the council," said Seneca President Robert Odawi Porter, who was contacted by The News to comment. "The best interests of the [Seneca] Nation will be served if this matter can be remedied as soon as possible."
When asked if he feels John should be removed from the council, Porter declined to comment.
A supporter of John's, a Seneca businesswoman who spoke on the condition that she not be named, said John and Porter are not on good terms because John was one of several council leaders who led an unsuccessful effort to impeach Porter and remove him as president last year.
"If Don John committed some violent crime like murder or rape, I would not want him serving in the council," the businesswoman told The News. "But I would NOT want him removed from office because he failed to pay cigarette taxes. A lot of Senecas feel that those [cigarette tax] laws are unfair."
John served as a deputy with the Cattaraugus County Sheriff's Office from 2004 until he retired in June 2010, according to the Sheriff's Office.
He admitted to a federal judge last year that between 2003 and 2008, he and his company distributed almost $5 million in contraband, untaxed cigarettes. The amount of taxes avoided by All-American Tobacco was estimated at just under $3.96 million, prosecutors said in court papers.
"Of this amount, approximately 60 [percent], or $2,375,980.20, was reasonably foreseeable by Donald John," the court papers state. The documents say John admitted he "knowingly and intentionally" broke federal laws.
Federal court documents filed after the September 2008 arrests of Salamanca-area developer Roosa, 54, and his wife offer some insights into the investigation.
In court papers filed in 2008, the ATF alleged that Joseph Roosa, around March 2003, "approached a member of the Seneca Indian Nation (CI #1)" and asked if Roosa could use "CI#1's status as a Native American" to create a tobacco distribution company that could avoid taxes. "CI#1" agreed to cooperate with Roosa "in exchange for a small portion" of the profits.
"CI" is a common abbreviation for "confidential informant," "cooperating informant" or "cooperating individual," law enforcement officials said.
According to Eoannou, Cambria and Joseph Roosa, "CI#1" in this case was Donald John. In later court documents, prosecutors identify Donald John by name as the co-conspirator who ran the business with Rita Roosa.
The 2008 court papers alleged that Joseph Roosa developed the website for All-American Tobacco, obtained tax-free cigarettes from the Senecas and, with his wife, illegally resold them to businesses in New Jersey. The 2008 court papers portray "CI#1" as someone who had very little to do with the business, other than lending it his name and his status as an Indian.
That is absolutely untrue, according to Eoannou, Cambria and Joseph Roosa, all of whom claim that Donald John asked Roosa to help him start the business by giving him office space.
They also said Donald John and members of his family had been running cigarette businesses for years before John approached Roosa.
Donald John hired Rita Roosa - who was born in Taiwan and speaks five languages - to manage the company, and Donald John gave her orders and made most of the profits, according to Eoannou, Cambria and Joseph Roosa.
It was unfair that the Roosas became the main targets of a major investigation, while John became a cooperating witness, Eoannou said.
"We believe that Don John found out his company was under investigation, went to the feds and gave them his story, which they bought hook, line and sinker," Eoannou said. "He blamed the whole thing on the Roosas."
"My office conducted its own investigation, and we told [federal officials] from the beginning that Donald John was lying to them ... that in reality, it was his business," Cambria said.
Rita Roosa "asked Don John again and again if what they were doing was legal, and he kept assuring her that it was legal," Eoannou said.
Joseph Roosa said his only role in the business was renting Donald John office space on Broad Street in Salamanca, where the business began its multimillion-dollar operations. Later, Roosa said, John moved the business to another location on Main Street in Salamanca, which was not owned by Roosa.
"I got $10,000 from them for ten months' rent, and that was all I got," Roosa said. He said his wife, for managing the business, was paid little at the start, but later received "$80,000 to $100,000 a year."
Ultimately, according to Cambria and Eoannou, the feds must have realized that John was misleading them. All charges against Joseph Roosa were dropped.
Two and a half years after charging the Roosas and giving John a pass, federal prosecutors in March 2011 changed course and charged John with two felony counts - conspiracy and trafficking in contraband cigarettes.
"I think they finally learned that Donald John had been lying to them," Cambria said. "He goes from being the federal government's darling star witness to a defendant. What does that tell you?"
Because Rita Roosa - unlike her husband - was actively involved in the company's day-to-day transactions, she decided to plead guilty to conspiracy and contraband cigarette trafficking. A judge sentenced her to nine months in prison in January 2011 and ordered her to make $3.9 million restitution to the State of New Jersey.
Eoannou blames federal prosecutors from New Jersey for failing to tell the sentencing judge that Rita Roosa was just a manager hired by Donald John.
"She is a very sweet, hard-working woman who did what she was told and absolutely did not deserve to go to prison in this case," the defense attorney said.
Although John pleaded guilty to the same two counts as Rita Roosa did, he was sentenced to three years on probation, ordered to pay a $250,000 forfeiture and almost $2.4 million in restitution - $1.5 million less than Rita Roosa was ordered to pay. He was required to wear an electronic monitoring device on his ankle for eight months.
Joseph Roosa is upset that he had to give up $2.5 million in business properties, which he claims are actually worth about $3.3 million. But he said he is more upset at what happened to his wife, who declined to comment for this article.
"She and I were arrested at our home, in front of our children, just as the morning school bus was driving by, full of students," Joseph Roosa said. "She spent nine months in prison. I can't tell you how devastating that was for her ... Even now, she wakes up at 4 in the morning, very upset."
Roosa realizes he and his family still have much to be thankful for. A former bus driver who started a small video rental business in the 1980s, he sold it for $5 million in 1996. He has developed many successful projects, mostly shopping centers in Western New York and several other states.
But seeing his wife targeted by the government has hit him hard, Roosa said.
"Corny as it sounds, I used to believe in the American government before all this happened," he said. "Not any more. They've taken that away from me."
