ALBANY – Three former top LPCiminelli executives caught up in the federal corruption case involving a major Buffalo Billion contract have asked a judge in Manhattan to dismiss the charges in the case.
If denied, Louis Ciminelli, Kevin Schuler and Michael Laipple want the trial to be conducted in a federal courtroom in Buffalo and not more than 300 miles away in lower Manhattan.
But in making those claims, it also was revealed that LPCiminelli has lost a total $3.88 billion worth of work and inventory and had to lay off 10 percent of its staff as a result of the federal probe and complaint.
After reports in September 2015 that LPCiminelli had received a federal subpoena, the company immediately lost 14 projects. Those "lost opportunities” included a $1 billion Yonkers school construction program, $228 million Rochester school project and $40 million project for the Buffalo Niagara Medical Campus.
An additional $1.7 billion worth of business – through cancellation or disqualification of LPCiminelli bids – was lost after the federal complaint was made public last September, the court papers say.
The half-dozen motions filed by attorneys for the defendants describe Buffalo as the “center of gravity” in the Buffalo Billion case and state that transferring the case to Buffalo “is in the interest of justice, for the convenience of witnesses and the parties and for judicial economies. The documents were filed with U.S. Southern District Court Judge Valerie Caproni on Monday but not made public until Tuesday evening.
Lawyers representing all four men submitted numerous documents and exhibits to the judge, including claims that Ciminelli is in a professional rebuilding period after he, Laipple and Schuler resigned their posts at LPCiminelli, Buffalo’s largest general construction contractor that won a Buffalo Billion request for proposal deal with a state university-created not-for-profit entity that has overseen construction of the SolarCity project at RiverBend.
The court papers claim the case – three separate counts involving wire conspiracy, wire fraud and bribery – should be dismissed, in part, because prosecutors picked the wrong venue location where the charges were brought and the case is to be tried.
The three men were charged as part of an alleged bid-rigging scandal in which prosecutors say a major Buffalo Billion contract was awarded to LPCiminelli through a conspiracy involving company officials and people connected to Fort Schuyler Management Corp., the not-for-profit tied to SUNY Polytechnic Institute in Albany formerly run by Dr. Alain Kaloyeros, who has also been charged in the Buffalo Billion and other upstate economic development projects.
In all, eight people are embroiled in the alleged pay-to-play scandals involving separate projects that go beyond the Buffalo Billion contracts. Among those caught up in the scandals are Joseph Percoco, a longtime friend and adviser to Gov. Andrew M. Cuomo, and Todd Howe, who represented both LPCiminelli and Fort Schuyler while the Buffalo Billion project was being considered. Howe, a longtime adviser to Cuomo, last year pleaded guilty to various counts.
Lawyers for Ciminelli, Schuler and Laipple sought to highlight for the judge what they called various legal flaws in the case U.S. Attorney Preet Bharara brought against their clients. They noted one charge lumped in allegations involving a Syracuse developer into a section on “Buffalo Billion."
They also noted there was no formal “bidding process” for the Buffalo Billion but rather a request for proposals “for unspecified projects in the Buffalo area’’ that could be terminated at any time by SUNY’s Fort Schulyer. Only after “arms’ length and prolonged and heated negotiations” did LPCiminelli enter into a deal to build RiverBend, the papers state, adding that the company signed not a “state contract” but a deal with Fort Schuyler, which is not a state entity.
Moreover, the new court papers say LPCiminelli executives did not bribe Howe.
“They did not give him money, they did not give any entity controlled by him money, they did not give him loans and they did not give him gratuities,’’ the court filings state. Howe worked for Washington-based WOH Government Solutions, a subsidiary of the Albany-based law and lobbying firm Whiteman Osterman & Hanna. It was the Albany firm that was retained by LPCiminelli.
The majority of the court papers, though, seek to lay out a case for why the approximately two-month federal corruption trial should be brought to Buffalo.
The lawyers for the three men state that the alleged crimes did not occur in the Southern District of New York, where Bharara brought his case, and that the trial will feature numerous defense witnesses being called who reside in Buffalo.
“Both the complaint and the indictment are wholly silent with respect to any specific acts, overt acts, facts, criminal conduct or non-criminal conduct by the Buffalo defendants having occurred in the Southern District of New York,’’ one of the court filings state. The different papers were submitted separately and jointly in one case by lawyers for the three defendants.
Moreover, the lawyers argue that the defendants all live and work in the Buffalo area and that they will be calling numerous defense witnesses from Western New York, whose travel expenses, to be paid for by the defense, will soar if the trial is held in Manhattan. The documents contend that Schuler will have to “go it alone” at a Manhattan trial because his family will not be able to regularly attend. The filing states he has a mother in the Buffalo area caring for his debilitated father and that his wife, an elementary school teacher, cannot get leave from her job to attend a lengthy trial.
The documents said the “most compelling” case for moving the trial is contained in a sealed declaration by Daniel Oliverio, a lawyer for Ciminelli. That document, though, has not yet been filed.
Moreover, the defense lawyers stated that most of the investigatory work done in the Buffalo Billion portion of Bharara’s case was handled by FBI agents in the Buffalo field office. Having a trial in Buffalo, rather than Manhattan, will be more convenient for not only the defendants and witnesses, but for also the government’s investigators at the FBI.
Bharara's office declined comment this afternoon.
The judge has a hearing date in April, when she has been expected to set a trial date. In the new court papers by the former LPCiminelli executives, lawyers seek an expedited hearing before the judge to consider their new motion to either dismiss the case or move it to Buffalo.
In a Feb. 3 filing that updated his investigation and the discovery process, Bharara submitted a filing to the judge noting that more than 1.7 million pages of various emails, phone records and forensic evidence from 22 electronic warrants have been made available to defense lawyers. An additional 16,000 pages were made available since Jan. 27, with another 70,000 documents still being readied as part of the discovery process.