NEW YORK – In a surprise development hours after they rested their case, prosecutors in the Buffalo Billion corruption trial acknowledged to a judge they had not introduced key evidence to prove one of the felony charges against Buffalo businessman Louis Ciminelli and former SUNY Polytechnic Institute leader Alain Kaloyeros.
With both sides heading to rest their cases Thursday afternoon, a post-lunch conference between lawyers and U.S. District Court Judge Valerie Caproni elicited a stunning last-minute development:
Prosecutors suddenly asked to reopen their case, to present new evidence they had failed to submit against the defendants.
“I came out here prepared to dismiss these counts,’’ Caproni told the lawyers in the midst of a legal fight over timing and possible lack of evidence to convict Ciminelli and Kaloyeros.
At issue are the wire fraud charges in the case, in which Paul Shechtman, Ciminelli’s lawyer, told Caproni before lunch that prosecutors had failed to meet a two-prong test: that emails or phone calls crossed state lines and touched – for venue purposes – the federal judiciary’s southern district based in Manhattan.
Without those two conditions, he told her, the wire fraud charges had to be dropped.
After lunch, with the jury kept in a side room, prosecutors told Caproni they had evidence to show that acts were committed – via an email – to prove wire fraud.
The problem was, acknowledged prosecutor Todd Podolsky, the email had not been put into evidence during the government’s case. Prosecutors had rested that case just before lunch.
Prosecutors asked Caproni to reopen the case so the evidence could be submitted.
“They rested,’’ Shechtman protested, rising from his chair in the third row of tables of lawyers representing the government and four defendants.
The evidence is an email from Dean Fuleihan, the former chairman of the board of Fort Schuyler Management Corp., the SUNY-created entity that handled the Buffalo Billion economic development program, to others announcing the 2014 awarding of a contract with LPCiminelli. Fuleihan is now the deputy mayor of New York City.
“The question is whether justice is served by allowing the government to reopen the case,’’ Caproni said.
Shechtman, the state’s top criminal justice head during the Pataki administration, urged the judge to deliver a message to prosecutors that alleged crimes should be handled in the proper courts – which he said in this case should have been upstate and not lower Manhattan.
“We ought to send the government a message,’’ Shechtman told her.
After discussions, Caproni sided with prosecutors’ request. “I am not minimizing the problem, but I also am balancing the public’s interest (in) having the jury decide this case,’’ she told the lawyers.
“I’m not happy about it,’’ Caproni said of her decision.
“This is putting into tension the issue of the public has an interest in seeing the criminal laws enforced. The public has an interest in having the jury decide this question. This was a mistake that should not have been made,’’ the judge added.
Caproni, not for the first time, noted the complexities of the case before her. “I have been very clear: this is a difficult case for the government. It’s a difficult case for the defense, a difficult case for everybody,’’ she said.
Monday at 9 a.m. could be the legal showdown for what erupted in the 26th floor courtroom in Manhattan Thursday afternoon.
Shechtman and Michael C. Miller, Kaloyeros’ lawyer, told Caproni that the government will have to prove Fuleihan sent or opened the email at issue while he was in the southern district court’s jurisdiction – which includes Manhattan. It does not include Brooklyn, where Fuleihan has a downstate residence, or Albany, where he has a home.
The email was sent via AOL – which would cross state lines because the company’s server is in Virginia. But it was also sent via his New York City email account, which may or may not have crossed lines.
Caproni appeared to agree with Shechtman’s assessment. “He would have had to open it in Manhattan,’’ Caproni said of the Fuleihan email.
It was uncertain Thursday how prosecutors might prove the email location question – and whether that will mean a technological means or via Fuleihan being called back to the stand and being asked if he recalled where the email was opened.
The fight did offer some legal irony. Had the trial been held in federal court in Buffalo, where Ciminelli worked and lived, there would likely have been plenty of the evidence – emails and phone calls – that prosecutors could have introduced to have at least met the technical reading of the law for their wire fraud allegations. It was Ciminelli's lawyers who submitted motions on a number of occasions over the past year or more to have the corruption trial held in Buffalo, not Manhattan; Caproni rejected those and other venue change motions by other defendants in the case.
The trial on Thursday was largely moving along in otherwise pro forma ways.
After the prosecution rested its case with the testimony of a former spokesman for Kaloyeros, lawyers argued for a couple of hours over defense motions – by lawyers for Ciminelli, Kaloyeros and Syracuse developers Steven Aiello and Joseph Gerardi – to dismiss the charges before the jury got the case.
Shechtman at one point said there is “no Lou,’’ which he defined as no evidence that Ciminelli committed illegal acts in the Buffalo Billion award.
In the afternoon, defense lawyers were scheduled to mount a brief case, and Caproni signaled she was ready to tell jurors to take off all next week and come back for lawyers’ final arguments on July 9.
Then all legal hell broke loose.
In asking the judge to reopen the case, Podolsky expressed confidence that the Fuleihan email will be enough to prove the geographic venue for a wire fraud conviction.
Caproni seemed taken aback, noting the unusual request to reopen the case and submit new evidence. After deciding the matter, the judge asked that the jury be allowed to return and for the defense to present its case. Then, the jury could come back Monday for continuation of the Fuleihan email controversy.
But Caproni bowed to defense lawyers who said they did not want to present their case until the prosecutors wrapped up their Fuleihan matter Monday.
The judge agreed, though she rejected requests to put the whole matter off until July 9.
Despite the potential legal victory for Ciminelli – depending on what happens Monday – the judge said flatly that “one way or another” the jury will still be asked to decide guilt or acquittal on a conspiracy charge against Ciminelli.
It is another count he is charged with for his alleged role in rigging a Fort Schuyler bidding process with others that awarded his company, LPCiminelli, designation in 2014 as the lead developer of the Buffalo Billion program. That deal soon led to his company getting tapped for the $750 million contract to build the solar manufacturing plant at RiverBend.
Miller, Kaloyeros’ lawyer, spent part of the morning cross-examining the final prosecution witness: David Doyle, a former SUNY Polytechnic spokesman for Kaloyeros who worked for years for Gov. Andrew Cuomo. Miller asked Doyle if he ever heard Kaloyeros say he had “tailored” an RFP process to favor a particular corporation.
“Always the opposite,’’ Doyle testified.
Doyle over the past two days also spoke of the power wielded by Todd Howe, the lobbyist who worked for both Kaloyeros and LPCiminelli and who prosecutors said was part of the scheme to steer the Buffalo Billion deal to Ciminelli’s company.
Doyle said Howe was placed in a consulting job at Kaloyeros’ SUNY school not far from the Capitol to be what he called the “eyes and ears” of the Cuomo administration over Kaloyeros and his operation.
Howe pleaded guilty for his role in that and other matters, including the bribery trial earlier this year against former top Cuomo adviser Joseph Percoco, who was convicted in that case.
On Thursday, Howe’s eight felonies related to those matters were read to the jury. As the morning went on, Kaloyeros grew visibly upset with Caproni for siding with prosecutors when they objected to questions Miller tried to put to Doyle. At one point, he shook his head from side to side before putting it down on the table in front of him.
A couple of hours later, after legal tussling over prosecutors’ being able to reopen their case, defense lawyers and their clients appeared more upbeat than any other time this week.
One defense lawyer gave a thumbs up to Shechtman after his pleadings before the judge over the Fuleihan email.