President of SUNY Polytechnic Institute, Alain Kaloyeros is also facing state charges -- in addition to felony fraud charges.
According to N.Y. Attorney General Eric Schneiderman, Kaloyeros has been charged with three felony counts of Combination in Restraint of Trade and Competition. Joseph Nicolla, 59, of Schenectady, the president of Columbia Development, has been charged with one felony count of Combination in Restraint of Trade and Competition.
The felony complaint alleges that Kaloyeros steered, or agreed to steer, the awarding of contracts to handpicked companies, including Nicolla’s Columbia Development.
“The charges filed today outline a blatant and brazen abuse of taxpayer dollars and the public trust,” said Attorney General Schneiderman. “This self-serving scheme alleged in the complaint was particularly egregious because it was aimed at enriching powerful people at the expense of the state’s public university system. We will continue to hold public officials accountable and ensure that all officials are held to the same high standard of integrity that New Yorkers deserve.”
According to the felony complaint, Kaloyeros, a government official, engaged in an ongoing scheme to direct the contracts for government financed projects to favored companies, including Nicolla’s company, Columbia Development. Rather than use a fair and competitive process to award contracts, Kaloyeros allegedly improperly used the Request for Proposal process to award certain contracts for the construction of facilities for SUNY Poly.
This collusion is evidenced in three separate alleged schemes:
The first scheme involved a contract for the development of a SUNY Poly student housing complex on Loughlin Street in Albany that was awarded to Nicolla’s company, Columbia Development. According to the felony complaint, Kaloyeros colluded with Columbia to give the company an unfair competitive advantage in the bidding process for the project. As part of the alleged scheme, Kaloyeros, who exercised effectively unilateral control over the bidding process, forwarded a solicitation from a rival construction company to Nicolla six months before the issuance of a state RFP. Then, a month before the RFP was issued, he allegedly sent Nicolla a note stating “time to prepare an RFP for student housing,” with the specifications included. According to the felony complaint, the housing project was to ultimately be financed with revenue from “room fees” paid by SUNY Poly students.
The second scheme related to the construction of the so-called NanoFab West research building. According to the felony complaint, Kaloyeros orchestrated the hiring and firing of multiple firms participating in the project, and ultimately awarded the most lucrative contract to a contractor who agreed to provide a $50,000,000 loan to a non-profit organization connected to SUNY Poly and effectively controlled by Kaloyeros. As part of the its proposal the contractor offered to provide a $3,000,000 research grant to SUNY Poly. According to the felony complaint, Kaloyeros’ compensation was determined in part by the amount of research grants awarded to SUNY Poly.
The third alleged scheme involved a collusive agreement with an architectural firm, where, in exchange for the firm’s agreement to lease space in a SUNY Poly building, Kaloyeros agreed to give the firm future work on SUNY Poly projects. According to the felony complaint, the architectural firm would increase its future rent payments to SUNY Poly in proportion to the amount of future state dollars steered to the company by SUNY Poly. According to the felony complaint, Kaloyeros boasted about his ability to unilaterally control the RFP process and to “write an RFP in such a way that only one company could win it.”
In a statement, SUNY Chancellor Nancy Zimpher said “It is imperative that any charges brought against SUNY Poly President Alain E. Kaloyeros today do not distract from the educational mission, ground-breaking research, and academic operation of SUNY Polytechnic Institute or negatively impact the thousands of students, faculty, researchers, and staff that the campus serves.
“Effective immediately and until this matter is resolved, Dr. Kaloyeros has been suspended without pay. SUNY will review the charges against Dr. Kaloyeros and cooperate fully with prosecutors on any further action as state and federal investigations continue.
“In order to ensure a seamless leadership transition for the entire campus community, we are directing executive staff at SUNY System Administration, under the leadership of Provost and Executive Vice Chancellor Alexander N. Cartwright, to collectively serve in an officer-in-charge capacity for the campus until an individual can be appointed," she added.
Kaloyeros is scheduled to be arraigned in Albany City Court on Friday, September 23rd.
If convicted on all charges, Kaloyeros faces a maximum sentence of 4 to 12 years in prison.
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