Ex-Ally of New York Governor Cuomo Convicted of Fraud

MANHATTAN (CN) – In an ominous verdict for New York Governor Andrew Cuomo, a federal jury found another of the incumbent’s allies guilty Thursday of defrauding a bid-rigging process.

Alain Kaloyeros with New York Governor Andrew Cuomo. (MIKE GROLL, AP)

The conviction of former State University of New York Polytechnic Institute president Alain Kaloyeros falls nearly five months to the day another jury convicted Joseph Percoco, the governor’s former top deputy in March.

Kaloyeros, a flamboyant nuclear physicist from war-torn Lebanon, saw his academic star rise in the New York where he ran the technical research institute in the capital. The professor 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.

Federal prosecutors began the case against Kaloyeros two years ago by claiming that he milked his connections to Albany to benefit from a corruption scheme, but the most serious allegations, including a bribery charge, fizzled shortly before trial.

A jury found Kaloyeros guilty of three counts of wire fraud in connection with bids on development projects in Syracuse and Buffalo.

The Syracuse real estate executives, Cor Development’s Joseph Gerardi and Steven Aiello, were found guilty as well of wire fraud. The jury convicted Gerardi as well on an additional count of lying to government representatives about the scheme.

Louis Ciminelli, a Buffalo real estate titan, was convicted of two counts of wire fraud in connection with Buffalo Billion, named after the 10-figure lump of cash meant to build up New York’s upstate metropolis.

U.S. Attorney Geoffrey Berman celebrated the speedy convictions in a case started two years ago by Preet Bharara, his predecessor.

“The inscription, ‘The true administration of justice is the firmest pillar of good government,’ is set in stone in the New York County Courthouse,” Berman said in a statement. “Those words have never been more poignant for the citizens of New York, as in quick succession less than four months apart they have seen this office secure convictions in separate prosecutions against the State Assembly Speaker, a close confidant and executive aide to the governor, and now the president of SUNY Polytech, the executive leading the expansive ‘Buffalo Billion’ initiative.”

Kaloyeros’ case is the last amid a flurry of corruption trials against powerful figures in Albany, New York’s capital. The prosecutions have swept up two leaders of the state’s judiciary and close associates of the governor.

Attorneys for three of the four defendants who gave interviews outside of court agreed: This was a difficult time to defend this type of case, and they plan to appeal the convictions.

“At the end of the day, all he really tried to do was the governor’s mission in Buffalo,” Kaloyeros’ attorney Michael Miller said. “He tried to take what had worked so beautifully in Albany and make it happen in Buffalo and Syracuse, and next thing you know, he’s in court and convicted of three offenses. Alain Kaloyeros is innocent. He did not rig bids. Not a penny was lost. He’s a good man. He did not deserve this.”

Ciminelli’s attorney Paul Shechtman said that anger at New York politicians is deserved, but he insisted that his client is the wrong target.

“You have a state and a lot of citizens in this state that think it is dysfunctional and that there is a culture of corruption, and portions of that accusation may be true, but Lou Ciminelli is not part of that,” he said. “To get swept in it – a good man swept up in it – is a great sadness.”

Attorney Stephen Coffey, whose client Aiello stacked up fresh convictions adding to a prior conspiracy count in March, noted that New York Senate Majority Leader Dean Skelos and his son had their retrial right down the hall from his client.

“These aren’t great times to try this case,” Coffey said.

“You’ve got the Skelos trial going on right next door to us. You just had the Silver trial,” he added, referring to twice-disgraced Assembly Leader Sheldon Silver. “You’ve got all these public corruption [cases]. You’ve got everything going on in Washington.”

New York politicians were less inclined than the defense attorneys to view this as bad timing and rotten luck.

Governor Cuomo quickly repudiated the man whom he once praised as “New York’s secret weapon,” upon announcing a $15 million film hub outside Syracuse in 2014.

“The jury has spoken and justice has been done,” the governor said. “There can be no tolerance for those who seek to defraud the system to advance their own personal interests. Anyone who has committed such an egregious act should be punished to the full extent of the law.”

Hoping to displace Cuomo in November, primary challenger Cynthia Nixon found her opponent’s attempt to distance himself unpersuasive.

“Andrew Cuomo is either corrupt or he is spectacularly incompetent,” Nixon said in a scorching statement. “Either way, the facts from the trials of Joe Percoco and Alain Kaloyeros lead to only one conclusion: We can’t clean up Albany until we clean out the governor’s mansion. Nothing is going to change until we change who’s in charge.”

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