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'Star witness' in Buffalo Billion trial implicates Ciminelli, Kaloyeros

NEW YORK – With his former boss – a man he still calls "Louis" – sitting just a few feet away, Kevin Schuler took the witness stand Thursday to talk about the crimes he committed and the people who he said helped him.

Schuler, described by defense lawyers as the "government's star witness," testified that defendants Louis Ciminelli and Alain Kaloyeros joined him in a scheme to illegally influence and win a $750 million state-funded project in Buffalo.

The former LPCiminelli vice president also picked Ciminelli and Kaloyeros out of a crowded courtroom when a federal prosecutor asked him to identify people who were part of the criminal conspiracy he took part in.

"We had significant influence over the project, influence over the RFP and influence over the process that was going to select a winner," Schuler told the jury.

Long-awaited and much-anticipated, Schuler's testimony implicated Ciminelli, former owner of the company, and Kaloyeros, the man Gov. Andrew M. Cuomo put in charge of the Buffalo Billion.

The two men are charged with operating a bid-rigging scheme that revolved around the drafting of requests for proposals that would ensure Ciminelli's success. At stake was the right to build a solar manufacturing plant at RiverBend, the former Republic Steel site in South Buffalo.

On the stand for the first time since admitting his guilt last month, Schuler explained why he elected to take a plea deal – and cooperate with the government – after nearly two years of maintaining his innocence.

"After confronting all the facts, I thought it was in the best interest of myself and my family," he said Thursday.

Schuler, now 47, also testified about Ciminelli's personal interests in the business, including an obsession with important relationships.

"Certainly, the relationship with Dr. K became an important one," he said of Kaloyeros.

He also told the jury about Todd Howe, the Washington, D.C., lobbyist hired by LPCiminelli to help with its efforts at becoming the Buffalo Billion's preferred developer.

During his time on the stand, he said Howe also worked for SUNY Polytechnic Institute as part of an effort by Kaloyeros, president of the college, to improve relations with Cuomo.

He said Howe was recommended by former Syracuse Mayor Tom Young, and often boasted of being best friends with Howard Glaser and Joseph Percoco, two top aides to the governor at the time. Percoco was convicted of fraud and conspiracy charges earlier this year.

He said Howe went to work for Kaloyeros despite a blunt warning from Glaser.

"There's no way you're going to be working for that ------ guy," Glaser told Howe, according to Schuler. "We don't trust him."

Howe, who also admitted guilt for his role in the scheme, testified at Percoco's trial but was arrested when he admitted violating his cooperation agreement. He is in federal prison.

Schuler, the witness everyone wanted to see this time around, testified for about an hour Thursday and will take the stand again Monday, when the trial resumes.

Earlier in the week, during opening statements, prosecutors offered a hint of what else might be coming when they predicted Schuler would testify that LPCiminelli, as part of its cover, insisted on a second winner in the competition for the Buffalo Billion project.

Schuler is also expected to testify that he picked that other contractor, and that it was a company much smaller than Ciminelli.

"Just think about that," Assistant U.S. Attorney David Zhou told the jury. "Schuler, whose company was supposedly competing for the RFP, chose the second winner."

Now in its fourth day, the trial before U.S. District Judge Valerie Caproni is casting a spotlight on Cuomo's Buffalo Billion, one of his signature economic development programs, and comes as the governor embarks on a re-election campaign.

On Wednesday, outside the jury's presence in the courtroom, Caproni described the Buffalo Billion case as a difficult one for the government to prosecute – a statement that speaks to the challenges facing the prosecution.

When Schuler was arrested, he was one of two Ciminelli executives charged with Ciminelli and, for nearly two years, the two men remained co-defendants.

And then, in the middle of May, Schuler appeared in federal court here and pleaded guilty to fraud and conspiracy charges. Perhaps, even more significantly, he agreed to cooperate with the government in its prosecution of Ciminelli.

Prosecutors dropped charges against the other LPCiminelli executive, Michael W. Laipple, who visited the courtroom Thursday and embraced Ciminelli.

It was Ciminelli defense lawyer Paul Shechtman who called Schuler the "government's star witness" in his opening statement. But it was also Shechtman who predicted Schuler would, in the end, come across as a defense ally.

"For 20 months, Kevin Schuler told friends and acquaintances that he was innocent," Shechtman said. "He once referred to the charges in this case as trumped-up nonsense."

After listening to Schuler's testimony, Shechtman said, the jury may wonder if he really did anything wrong. He also told jurors that Schuler hoped to avoid jail time so he could stay at home with his two young children.

"Kevin Schuler will be called by the government, but you will conclude that Kevin Schuler is more of a defense witness, more of a witness for Lou Ciminelli, than a witness for the prosecution," Shechtman said.

By cooperating with the government, Schuler hopes to reduce his sentence. He is facing a maximum of three years in prison.

While nothing is guaranteed, federal prosecutors said they will make a recommendation as to leniency when Schuler is sentenced.

Schuler's appearance Thursday followed the testimony of two witnesses involved in the selection of Ciminelli and COR Development of Syracuse as the preferred developer for Buffalo Billion projects in their cities.

Robert Geer, a former member of the board overseeing the projects, testified about his role in the selection and why he considered it a "fair and competitive" process.

He also said Kaloyeros never tried to interfere or influence the selection.

The trial will continue Monday.

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