Reddit reviews Captain Kidd and the War against the Pirates

Other posters have touched on the heart of it, but here is a little elaboration if you want to know more:

The only recorded instance of pirates burying treasure anywhere is when Captain William Kidd buried a portion of his ship's cargo on Long Island before meeting with Richard Coote, Earl of Bellomont and Governor of New York. It bears mentioning that he didn't bury this treasure specifically to dig it up later, but because he was facing charges of murder and piracy and his goods were likely to be seized.

He buried the treasure to use as a bargaining chip with Bellomont, hoping it would give him leverage and help him avoid going to trial (Bellomont was one of his benefactors and had even financed a previous voyage). This tactic failed completely, and Kidd's treasure was simply dug up. There are rumors that portions of it remain buried, but this is almost certainly nonsense.

I'd also like to point out that Kidd, in terms of what we usually refer to as 'pirates', hardly qualifies at all. He was well known and respected among the colonial nobility, went to sea with the funds and blessings of many high-ranking people, and happened to end up on the wrong end of a political scandal and with his hand in the cookie jar, so to speak. His trial was rushed, and he may have even had a legitimate letter of marque, making him a privateer, not a pirate.

Robert Louis Stevenson used Kidd (or rather, the fictionalized Kidd-as-pirate that had persisted to the late 19th century) as a prototype for Long John Silver, and embellished the part about burying his treasure. Treasure Island is really the root of so many of the pirate icons we know and love (peg legs, parrots, buried treasure, etc.).

If you're interested in learning more, I recommend you take a look at Captain Kidd and the War Against the Pirates, The Pirate Hunter, and Under the Black Flag.

Edit: It's actually Gardiner's Island, as one of the above posters mentioned, which is near Long Island, but is separate.

A more scholarly source on the history of Captain Kidd is Robert C. Ritchie's Captain Kidd and the War against the Pirates. Zacks doesn't provide that sources for where he gets his conclusions that Kidd was innocent.
http://www.amazon.com/Captain-Kidd-War-against-Pirates/dp/0674095022