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Defense lawyers press to get Buffalo Billion case dismissed

ALBANY – Could the case against the Buffalo Billion defendants be dismissed?

Lawyers representing six of the defendants have spent the past several weeks in a new letter-writing campaign to a federal judge seeking dismissal of the bid-rigging corruption charges leveled against individuals involved in several major upstate economic development programs, including the mega-construction project at Tesla’s Riverbend site in South Buffalo.

They have not been mincing words.

In describing prosecutors’ case against their defendants – including Buffalo businessman Louis Ciminelli and former SUNY Polytechnic Institute President Alain Kaloyeros – the team of lawyers wrote of the government’s “untenable” legal theory, “meager allegations,’’ and “ill-conceived and improper interpretation of the law.” Of the prosecution’s allegations of harm done by the alleged bid-rigging scheme, one of the defense lawyers called it “entirely speculative and metaphysical.’’

In his own five-page response, Acting U.S. Attorney Joon Kim’s counter-argument essentially came down to one word in describing the legal positions of the defense lawyers: “misplaced.’’

A chronology of the Buffalo Billion and the federal probe into it

This new round of letters to U.S. District Judge Valerie E. Caproni, which began in the second week in August and continued until a few days ago, was prompted by a recent decision by another federal judge in Manhattan on an unrelated case. In that case, United States vs. Davis, Judge Loretta A. Preska in early August overturned a jury conviction of a Canadian steel executive and his Ontario company. They had been  accused of defrauding a program intended to help women and minorities get work in the reconstruction of the World Trade Center in lower Manhattan.

Defendants seek dismissal, or separate trials, in Buffalo Billion case

Though the executive, Larry Davis, may have misled the owners of the property – the Port Authority of New York – about the true level of subcontract work given to minorities and women business owners, “the evidence was not sufficient for a rational jury to find that the alleged misrepresentations went to an essential element of the contract or that they exposed the Port Authority to potential or actual economic harm,’’ Preska wrote.

Within days, the defense lawyers in the Buffalo Billion case seized on the Davis case ruling. In a series of letters, the lawyers zeroed in on “right to control” issues in the Buffalo case in which prosecutors allege that a nonprofit organization affiliated with the State University of New York – called Fort Schuyler Management Corp. – was deprived by the Buffalo defendants of “its right to control its assets’’ as a result of the allegedly corrupt request-for-proposals process.

The defense lawyers stressed that the bid-rigging allegations are directed at a request-for-proposals process in which Buffalo’s LPCiminelli and Syracuse’s Cor Development Corp. were selected as “preferred” developers for future projects in those two areas. Such RFPs, however, were “non-binding” on the actual contracts that led, for example, to LPCiminelli being picked by Fort Schuyler to construct the Tesla plant in Buffalo. The actual contracts, including the $750 million construction project at Riverbend, came later in a separate process and were not specifically the target of prosecutors, the lawyers argue.

Moreover, defense counsels maintain that Fort Schuyler is a private entity, not public, and that, in the case of RiverBend, the corporation was not defrauded because it ended up getting what it was seeking: a new solar manufacturing plant.

”The government has not, and cannot, allege that Fort Schuyler received anything other than what it bargained for with regard to the subsequently negotiated contract,’’ Terrence Connors, a Buffalo lawyer, recently wrote to the judge. His firm is representing former LPCiminelli executive Kevin Schuler, though the letter sent the judge was on behalf of Schuler, Ciminelli and Michael Laipple – ex-PCiminelli executives charged in the bid rigging case.

The lawyers' effort to convince Caproni to dismiss the case before trial faces a high hurdle. But the issues being raised now could portend what future court appeals may look like. It is uncertain when the judge might rule on the motions or even if she might order that testimony be taken before she makes a ruling.

Separate letters to the judge, supplementing previous motions earlier this spring to get the corruption cases dismissed, came from Steptoe & Johnson, a Manhattan firm representing Kaloyeros, and O’Connell & Aronowitz, an Albany firm that wrote to the judge on behalf of Steven Aiello and Joseph Gerardi, executives of a development firm charged in a Syracuse bid-rigging scheme that includes some of the same players as the Buffalo Billion case.

“It’s our obligation to bring to the court any recent cases that deal with issues pending before the court. That’s the primary motivation. It’s not just that the new (Davis) case deals with this issue, but it’s a case written by a respected jurist that supports our arguments for dismissal,’’ Connors said in an interview.

Kim, who is serving in an acting capacity until President Trump names a new head of the U.S. Attorney’s office in Manhattan, declined to comment further than the legal position contained in his Aug. 23 letter to the Buffalo Billion judge. Kim has been on the job since March when Trump fired former U.S. Attorney Preet Bharara.

The original case that began with the Buffalo Billion investigation was recently split by Caproni into two cases. One case – which includes bribery and other allegations against Joseph Percoco, a longtime friend and adviser to Gov. Andrew M. Cuomo – has a January trial date. The second case, featuring the Buffalo and Syracuse executives, along with Kaloyeros, is set for jury selection next June 11. As of now, both trials are to be held in Manhattan.

Buffalo Billion trial date put off until next May – at least

In seeking a dismissal, one of the defense letters maintains that the request-for-proposals did not guarantee any specific work for the developers, including LPCiminelli. “The RFP process did not subject (Fort Schuyler) to harm or any potential harm because the RFP’s did not award specific compensable projects. The government’s harm claim – that the nonbinding RFP process impacted subsequent contracts in an unidentified way – is entirely speculative and metaphysical,’’ wrote Steptoe & Johnson’s Michael C. Miller in an Aug. 29 letter to the judge.

In its counter-letter to the judge, Kim said the defense is cherry-picking cases on which to base their arguments for dismissal. Importantly, he wrote, the acquittal ordered in the Davis case was based on evidence presented at a trial. Indeed, a bid by Davis’ lawyers to get the case dismissed before a trial was rejected by the judge.

“Davis provides no support for the defendant’s position,’’ Kim wrote.

Prosecutors have alleged a widespread corruption scandal involving one of Cuomo’s signature upstate New York economic development projects. Todd Howe, another longtime Cuomo ally, has already pleaded guilty for his role in the case and has been cooperating for more than a year with prosecutors and the FBI. The cases revolve around allegations that projects – including the solar plant at Riverbend, the biggest project of Cuomo’s Buffalo Billion program – were put together in ways that ended up favoring LPCiminelli and Syracuse’s Cor Development as winning bidders.

Kim reminded the judge of allegations that the developers “were willing to pay bribes to Howe,’’ a Washington-based lobbyist whose firm represented the developers and SUNY Polytechnic, in order “to ensure their selection” in the Buffalo and Syracuse projects. Howe was working with both the developers and Kaloyeros at the time.

In the Davis case involving the steel contract at the World Trade Center worth nearly $1 billion, the defendant was accused of making false representations involving “aspirational” hiring goals of minorities and women. In the Buffalo and Syracuse cases, Kim wrote, the alleged fraud “went to the entire making of the relevant agreements” for the projects, including Riverbend.

But in a counter-response to Kim, the lawyer for Kaloyeros urged the judge to avoid a costly trial. “Here, because it is undisputed that the RFPs and contracts at issue were separate, this court should dismiss this case now rather than waste judicial resources on a trial,’’ Miller wrote the judge last Tuesday.

Late Thursday, Connors sent the judge another letter on the matter, arguing that the indictment itself is legally lacking. “Forcing the defendants and the court to endure a months-long trial on a futile theory of prosecution is simply perverse,’’ Connors wrote the judge.

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