Kevin C. Schuler, the LPCiminelli vice president charged in the politically charged Buffalo Billion bid rigging case, pleaded guilty to a pair of felony charges late Friday afternoon in federal court in Manhattan.
He agreed to cooperate with law enforcement, including possibly testifying in the trial of two other LPCiminelli executives that begins next month.
Schuler pleaded guilty to wire fraud and conspiracy to commit wire fraud before U.S. District Judge Valerie Caproni. Prosecutors have agreed to drop a bribery charge against him as long as he cooperates.
Schuler and two others – company President Louis P. Ciminelli and Michael W. Laipple, also a top official of LPCiminelli – were accused in 2016 of making payoffs to a state consultant who then ensured the firm would be the state’s “preferred developer” for one of the most expensive public works projects in Buffalo history – the $750 million factory at RiverBend in South Buffalo that is now home to Tesla.
The trial of Ciminelli and Laipple and others is slated to start in New York on June 11, and its results could be part of this fall's election as Gov. Andrew M. Cuomo seeks re-election. The Buffalo Billion program, which concentrated on economically lagging Western New York, served as the signature element of his upstate economic development efforts.
Late on Friday afternoon, Schuler appeared at a "change of plea" hearing in the Manhattan courtroom. He admitted the wire fraud charges, while the proceedings also noted that an earlier charge related to "payment of bribes and gratuities" would be dismissed.
"Based on additional investigation, the government believes that there is not a sufficient factual basis to proceed to trial against the defendant on the count, and therefore will move at sentencing to dismiss," U.S. Attorney Geoffrey S. Berman said in court papers.
The agreement his lawyers reached Friday surround his participation in the scheme between 2013 and 2015 "in relation to the tailoring and rigging" of requests for proposals put forth by Fort Schuyler Management Corp for preferred developers in Syracuse and Buffalo.
Fort Schulyer is the state-sponsored entity that oversaw major upstate development efforts like the RiverBend project in Buffalo and others in Syracuse.
And significantly, Schuler agreed to cooperate with the government just weeks before the first of the Buffalo Billion defendants stand trial.
"It is understood that Schuler ... shall cooperate fully with this office, the Federal Bureau of Investigation, and any other law enforcement agency designated by this office," the papers indicate.
That includes attending all meetings requested by law enforcement, providing any documents sought and testifying "before the grand jury and at any trial and other court proceedings with respect to matters about which this office may request." As a result, it is possible that Schuler could take the stand against his former boss, Ciminelli, and the others standing trial next month.
Paul Schectman, a Ciminelli attorney, immediately noted he does not expect the move to affect his client.
“Kevin Schuler is a good man, but he’s not the first person to plead guilty under the pressure of a federal criminal indictment," Schectman said. "I remain confident that at trial Kevin’s testimony will prove favorable to Louis Ciminelli and Michael Laipple, who I know he respects greatly.”
Schuler's cooperation also precludes any potential action against him regarding criminal tax violations, but also firmly establishes his guilt in the case.
"The defendant hereby acknowledges that he has accepted this agreement and decided to plead guilty because he is, in fact, guilty," the agreement says.
Still, the papers signed Friday by Schuler and his attorney, Terrence M. Connors, stipulate that the defendant will make restitution "in an amount to be specified by the court." Schuler also agreed to forfeit any proceeds gained from the activities outlined in the charges.
Connors was not available for comment late Friday.
Schuler is expected to remain free on the bail conditions stipulated back in October of 2016, when he was first arrested and charged, which includes a $50,000 personal recognizance bond. He could face three years in prison, a $250,000 fine and other financial penalties under the law, but the agreement notes his cooperation and that federal authorities will convey that to the judge at sentencing – if cooperation continues.
While nothing is guaranteed, the federal prosecutors say they will "inform the Probation Office and the court of ... the nature and extent of Schuler's cooperation with this office."
Friday's developments in the Buffalo Billion case follow the March conviction of Joseph Percoco, Cuomo's longtime friend and confidant who was found guilty of three felony counts for his role in a bribery scheme in which corporate interests got special attention in return for a steady flow of bribe money paid into Percoco’s personal bank account.