Early on a Thursday morning almost a year and a half ago, FBI agents showed up at the front doors of three top executives of Buffalo’s LPCiminelli Co.
By the end of the day, the three well-known men were appearing in U.S. District Court to answer charges of wire fraud, conspiracy, and most significantly – bribery.
Now one of those defendants – former LPCiminelli Vice President Kevin C. Schuler – has admitted to felony counts of wire fraud and conspiracy to commit wire fraud. But in the plea deal reached Friday in Manhattan before U.S. District Judge Valerie E. Caproni, prosecutors acknowledged they lacked enough evidence to pursue the bribery count.
Lawyers and defendants in the case, which also includes Ciminelli Chairman Louis P. Ciminelli and company executive Michael W. Laipple, are tight-lipped this weekend with the “Buffalo Billion trial” beginning June 11. But those familiar with the case say Friday’s dismissal of the bribery charge is significant, and speculate that Schuler’s promise of cooperation with the government may allow him to dodge testifying against his former LPCiminelli colleagues, who still face an array of charges, including bribery.
“There is no indication of who was in the conspiracy, and that may protect his relationship with Louis and Mike,” said one source familiar with the situation who asked not to be identified.
The source also said defense attorneys for all those charged should be buoyed by Friday’s plea because bribery has been removed from the case, at least for one of the key defendants.
“They said there was insufficient evidence and now it is just wire fraud,” the source said. “[Bribery] will be pretty hard to pursue after they said one of the defendants did not do it. It’s a positive.”
Prosecutors, of course, take a different view. They see Schuler’s plea and promise to testify at the Buffalo Billion trial as a key development, casting him in the same vein as Albany insider Todd R. Howe during the recent trial that convicted Joseph Percoco, Gov. Andrew M. Cuomo’s long-time confidant.
After also negotiating a plea deal early in the process, Howe emerged as the government’s key witness in the March trial that found Percoco guilty of three felony charges, including conspiracy to commit honest services fraud, conspiracy to commit honest services wire fraud, and solicitation of bribes and gratuities in connection with a low-show job given to his wife by an energy company with a downstate power plant interest before the Cuomo administration.
The source who spoke with The Buffalo News on Saturday does not anticipate the same kind of ferocious cross-examination for Schuler should he take the witness stand, as Howe endured by Percoco’s attorneys. The source said Schuler will not bring the same baggage to the trial as Howe, who was jailed during the proceeding for violating terms of his release on bond.
“He doesn’t have the collateral stuff on him like Howe,” the source said. “They will just cross-examine him on the factual basis of the charges.”
Every sign persists, however, of Schuler negotiating a plea that requires him to disclose everything he knows about some defendant – whether its Ciminelli, Waipple, or SUNY Polytechnic President Alain E. Kaloyeros.
Ciminelli attorney Daniel C. Oliverio told The News in September of 2016 shortly after the arrests that he views Howe as chief government witness in the trial. Oliverio also said then that the Ciminelli defense team will attack Howe’s credibility, just like Percoco’s attorneys in the case that ended in March.
“Todd Howe’s credibility is one of the primary foci of this case,” Oliverio said then. “If you carefully read this case, he is the guy who pulls the entire case together with regard to the Ciminelli defendants.”
The indictments against the original eight men arrested in 2016 in the wide-ranging corruption case include the allegation that LPCiminelli, one of Buffalo’s largest construction contractors, was “pre-selected” as part of a bid-rigging scheme. The selections of LPCiminelli for the SolarCity factory project at RiverBend in South Buffalo and COR Development for a Syracuse-area project came after both companies “had each made sizable contributions” to Cuomo’s campaign fund, according to the indictments.
Two of the figures in the case, Kaloyeros and Howe, worked with the LPCiminelli executives to “secretly tailor” the SolarCity project to favor the Buffalo company, the indictments say.
The indictments allege that:
• The deal, eventually valued at $750 million, to build the RiverBend plant was steered to a politically favored company whose top executive, Ciminellli, was a major Cuomo donor.
• COR Development of Syracuse also benefited from an inside deal for a Central New York economic-development project – worth $105 million – intended to dissuade competitors from bidding on the contract.
• Percoco received bribes to help an energy company try to gain a state contract for the downstate power plant.
Meanwhile, Schuler could still face jail time even after his change of plea and promise to cooperate, according to the agreement he signed in New York on Friday. But prosecutors also noted they will inform the judge of his help in the Buffalo Billion case as long as he upholds his end of the deal.
Indeed, the agreement indicates prosecutors will file a motion with the court outlining “that Schuler has provided substantial assistance in an investigation or prosecution.”