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Seneca Gaming Corp. Files Suit Against Former Employess
Alleging Misappropriation of Company Information

By Dan Herbeck, The Buffalo News, N.Y.McClatchy-Tribune Regional News

Apr. 6, 2010--The Seneca Gaming Corp. has accused two of its former information technology executives of misappropriating company secrets and using them to start their own casino marketing business.

The company that runs the Seneca Nation's gambling casinos has filed a State Supreme Court lawsuit against a marketing firm called Harvest Trends, another company called River Lee International and four individuals.

Two of those individuals were identified in court papers by the Senecas as Susan Kesel, former vice president of information technology and chief information officer for the gaming corporation, and Colleen Cutler, former director of information technology program management. The Senecas said the two women worked for the gambling corporation from 2007 until leaving their jobs in February. The other two individuals mentioned in the suit were not employed by the Senecas.

According to the lawsuit, Kesel and Cutler are now executives for Harvest Trends, which is trying to sell a marketing strategy to casinos, including those that compete with those run by the Senecas.

Darren Cahr, an attorney for Seneca Gaming, said the company is "moving aggressively" to prevent the use of "confidential and proprietary materials" that he alleged were taken from the company.

"Moreover, we will continue to pursue this investigation until we have identified every participant in this effort to damage Seneca Gaming Corp., and have taken appropriate actions against them," Cahr said.

Kesel and Cutler did not return repeated telephone calls and e-mails seeking their comments.

On its Web site, Harvest Trends says it has designed a program called Patron Trends to help casinos "of all sizes" market themselves to "high-value players" who enjoy casinos.

The company says it is based in Chicago but also lists addresses in Scottsdale, Ariz., and Youngstown, in Niagara County.

"Our attorneys are aware of the allegations and are reviewing the papers," Jackie Parker, president of Harvest Trends, said in a brief statement. "Harvest Trends intends to vigorously defend itself against these allegations."

Seneca Gaming officials described River Lee International as a company that was hired to help Seneca Gaming develop a new marketing strategy. Officials of River Lee International, based in Phoenix, did not return calls or an e-mail seeking their comment.

The lawsuit claims Kesel and Cutler were assigned to work with River Lee International to create a program to improve Seneca Gaming's marketing efforts aimed at repeat customers.

"Instead, these employees worked with . . . River Lee International Inc. to create a new venture, Harvest Trends Inc., that would make the same type of system and services available to competing gaming companies," Seneca Gaming said in a news release.

"These efforts, made on company time using company resources, took place over the space of a full year and involved the misappropriation of the company's confidential information. While the information used by the defendants does not appear to contain personally identifiable information about individual patrons, it contains valuable information about customer behavior."

In court papers, lawyers for Seneca Gaming said to developing an extensive client base of casino customers normally would cost "millions of dollars over several years."

"Harvest Trends, by contrast, has been in existence for less than a year, yet, thanks to its unscrupulous founders, it already has a vast and valuable customer database -- [Seneca Gaming's] -- at no expense of its own," Seneca Gaming said in court papers.

In addition to filing the lawsuit, Seneca Gaming asked the state court to issue a preliminary injunction ordering the defendants to return the confidential information.

"[We] will do what is necessary to protect our business," said Catherine A. Walker, chief operating officer of Seneca Gaming.

The lawsuit also claims that Brian Hansberry, Walker's predecessor as chief operating officer, was listed in a business plan as a partner in Harvest Trends, but the suit does not name him as a defendant.

Hansberry, who could not be reached to comment, left his job running the Seneca casinos last April. He never has disclosed his reasons for leaving, and Seneca Gaming officials never said whether he left voluntarily or was forced out.

Seneca Gaming reported that its three casinos attracted more than 9.5 million visitors last year. The gambling company said more than 3,500 people work at the three locations.

Buffalo attorneys John G. Horn and David T. Archer filed the lawsuit.


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