Corruption Angle Reined In for New York Fraud Trial

MANHATTAN (CN) — Federal prosecutors scaled back corruption language Monday as they kicked off the much-awaited trial over alleged bid-rigging in the Buffalo Billion economic-investment program.

“This is a case about lying and cheating to get huge state construction contracts worth hundreds of millions of dollars, all paid for by the taxpayers of New York,” Assistant U.S. Attorney David Zhou told jurors this morning.

With hardly a mention of New York Governor Andrew Cuomo, the government’s opening argument against Alain Kaloyeros marked a dramatic departure from how it framed the case in 2016.

Kaloyeros had been forced to resign that year from his post as president of the State University of New York’s Polytechnic Institute when his name appeared on a criminal complaint that accused Cuomo’s former right-hand man Joseph Percoco of taking bribes.

Percoco was convicted in March, but the government’s remaining case against Kaloyeros hinges on fraud and conspiracy, having dropped bribery counts on the eve of trial.

Steptoe Johnson attorney Reid Weingarten told the jury today that the governor and Kaloyeros were never close. “He’s not a supporter or a friend of Andrew Cuomo,” said Weingarten.

After fleeing his native war-torn Lebanon, Kaloyeros saw his academic star rise in the New York where he ran the technical research institute in the capital. A nuclear physics professor, Kaloyeros registered dozens of patents in his name, drove around in metallic black Ferrari Spiders, and schmoozed with political titans on initiatives to lure the tech industry to the Empire State.

“He’s a one-man band, a lone ranger,” Weingarten told the jury.

Not alone on the docket, however, Kaloyeros is standing trial this week with three others including Buffalo developer Louis Ciminelli.

“Ciminelli’s company got a factory worth half a billion dollars,” Zhou said today.

The other two defendants, Steven Aiello and Joseph Gerardi, stood trial with Percoco as well.

Aiello, the former president of Syracuse developer COR Development, notched a conspiracy conviction in that trial, but Gerardi, who had been COR’s general counsel, escaped the last round with an acquittal.

In the new proceedings, the group stand accused of rigging bids for a program called the Buffalo Billion, which aimed at reinvigorating industry on the New York’s northern border with a 10-figure flush of cash.

Aiello’s attorney Stephen Coffey claimed that his client knew nothing about the request for proposals in the bidding process that prosecutors call rigged.

“Steven Aiello knows as much about this as he does about the nuclear physics that Mr. Kaloyeros is an expert in,” Coffey told the jury.

Peter Galbraith Kelly, yet another defendant named in the 2016 complaint, cut a plea deal after the jury hung on his charges.

While still pursuing charges against Ciminelli, prosecutors abandoned claims against former co-defendant Michael Laipple earlier this month. Another LPCiminelli executive, Kevin Schuler, will testify at the trial after pleading guilty to wire fraud.

Ciminelli’s attorney Paul Shechtman paraphrased Billy Joel’s song “Innocent Man” to describe why he says his client did not also cop a plea.

“Some people run from a possible fight,” Shechtman said. “Some people think they’ll never win. I’m not one of them. I’m an innocent man.”

A star attorney from Bracewell firm, Shechtman told the jury he is also a piano player, but he quipped that New York’s better known “Piano Man” is “far better.”

The Buffalo Billion program, announced during Cuomo’s 2012 State of the State address, flushed $1 billion into the western New York metropolis on Lake Erie known as The Nickel City.

The once-proud border once was a bustling economic hub, a trade route to the Midwest with a booming grain, steel and automobile industry.

Midway through the 20th century, the departure of Midwestern industrial giants sent tens of thousands of New Yorkers elsewhere, and with them, fewer tourists to such sites as the four buildings designed there by legendary architect Frank Lloyd Wright.

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