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LPCiminelli officials among nine charged with fraud in connection to state projects

Defendants include SUNY Polytechnic president
Posted at 8:33 AM, Sep 22, 2016
and last updated 2016-09-23 09:37:37-04

Nine people, including three top executives at Buffalo-based LPCiminelli, a former executive deputy secretary to Governor Cuomo, and the president of SUNY Polytechnic Institute, are facing charges in a widespread statewide corruption probe.

The US Attorney's office says the defendants are charged for their roles in two bribery and fraud schemes, in connection with the award of hundreds of millions of dollars in New York State contracts and other official state actions.

The local defendants - Louis Ciminelli, chairman and CEO of LPCiminelli, and LPCiminelli top executives Michael Laipple and Kevin Schuler - are facing charges directly related to the construction of the Riverbend site funded by the Buffalo Billion.

All three were arrested by the FBI and U.S. Marshals at their homes shortly before 7 a.m.  

Terry Connors, attorney for Kevin Schuler, explained his client was arrested despite constant contact with authorities.  Connors said Schuler has "never been charged with anything and has a strong position in this community... these are pillars of this community."  

Ciminelli, Laipple and Schuler pleaded not guilty in U.S. District Court in Downtown Buffalo Thursday to charges of wire fraud, conspiracy and charges related to bribes and gratuities.

Ciminelli was aware of the investigation since June of 2015, according to his attorney.

U.S. Attorney Preet Bharara said corruption and bid-rigging were at the heart of the Buffalo Billion program, which he called a "pay-to-play scheme for hand-picked donors."

The charges claim LPCiminelli had "become the preferred developers" in Buffalo after making sizable contributions to the Governor. It claims that Ciminelli and his immediate family members contributed at least $100,000 to the Governors' election campaign between December 2009 and January 2014. Additionally in November 2014, Ciminelli hosted a fundraising dinner for the Governor, which raised approximately $250,000.

Similar charges are levied against developers in Syracuse.

The other defendants include: Joseph Percoco, the former Executive Deputy Secretary to the Governor,  Alain Kaloyeros, the president of SUNY Polytechnic Institute, Peter Galbraith Kelly, Steve Aiello, and Joseph Geradi.

Prosecutors say Governor Cuomo is not facing any allegations in connection with this probe.

Governor Cuomo released a statement Thursday afternoon, saying the case is now in the hands of the court, and his administration will continue to cooperate as needed.

"If the allegations are true, I am saddened and profoundly disappointed," said Cuomo. "I hold my administration to the highest level of integrity. I have zero tolerance for abuse of the public trust from anyone. If anything, a friend should be held to an even higher standard. Like my father before me, I believe public integrity is paramount. This ort of breach, if true, should be and will be punished."

In a statement from Mayor Brown, he also says the violation of trust is disturbing.

"The trust of the public is very important, and any abuse of that trust is unacceptable," said Brown. "As the Governor said, if the allegations prove to be true, that will be very disappointing. However, the progress and growth in the City of Buffalo over the past decade is real, and I do not want to see our momentum impeded or stymied in any. We should be proud of the great progress that has been made in the City of Buffalo, and across the State of New York, by many, many hard-working people."

A PR firm released a statement on behalf of Frank Ciminelli, President of LPCiminelli, regarding the federal charges.  "We are confident that all company officials acted appropriately and legally.  When given the opportunity to fully respond to these charges, we are confident everyone will be vindicated," Ciminelli said.

The entire criminal complaint can be seen below.

 

This is a breaking news story. More information will be added as it becomes available.