N.Y. developer pleads guilty ahead of 'Buffalo Billion' corruption trial

[May 19, 2018]  By Brendan Pierson

NEW YORK (Reuters) - A former executive at an upstate New York developer pleaded guilty and agreed to cooperate with federal prosecutors in a corruption case against a former state university official and others over a $1 billion government project.

Kevin Schuler, formerly an executive at Buffalo-based LPCiminelli, admitted on Friday to wire fraud and conspiracy charges before U.S. District Judge Valerie Caproni in Manhattan, less than a month before a scheduled trial.

Schuler said he was involved in a bid-rigging scheme that allowed his company to win a lucrative contract as part of "Buffalo Billion," a signature economic development project of New York Governor Andrew Cuomo to revitalize the region around Buffalo, New York.

The plea means Schuler may testify against Alain Kaloyeros, a former president of the State University of New York's Polytechnic Institute, and former LPCiminelli executives Louis Ciminelli and Michael Laipple at their scheduled June 11 trial.

Prosecutors have said Kaloyeros, who oversaw the bidding process for Buffalo Billion, worked with lobbyist and former Cuomo aide Todd Howe to rig the process in LPCiminelli's favor, and that Schuler, Ciminelli and Laipple paid bribes to Howe.

Schuler did not, however, plead guilty on Friday to paying bribes.

Howe has pleaded guilty and is also cooperating. He and Kaloyeros were also charged with rigging a bidding process for another Buffalo Billion contract in favor of Syracuse, New York-based developer COR Development Co.

Two former COR executives, Steven Aiello and Joseph Gerardi, were also charged with bribing Howe, and are also expected to be defendants in the upcoming trial.

Both were also defendants in a separate trial for allegedly bribing Joseph Percoco, a former top Cuomo aide, to win favorable treatment for COR.

Percoco was found guilty on multiple corruption charges. Aiello was convicted of one count of conspiracy, while Gerardi was acquitted.

Jurors also deadlocked on charges against energy executive Peter Galbraith Kelly, but he pleaded guilty to fraud last week rather than face a second trial.

Howe testified as a star witness for prosecutors in the earlier case, but was jailed after admitting under cross-examination that he had violated his cooperation agreement.

(Reporting by Brendan Pierson in New York, editing by G Crosse)

[© 2018 Thomson Reuters. All rights reserved.]

Copyright 2018 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.