Two executives at Fayetteville–based COR Development Company, LLC are among nine people charged in a case involving federal corruption and fraud offenses.
The charges arise from two “separate but overlapping schemes” involving bribery, corruption, and fraud in the award of hundreds of millions of dollars in New York State contracts and other official state actions.
The accused also include Alain Kaloyeros, the president of SUNY Polytechnic Institute (SUNY Poly). SUNY has “relieved” Kaloyeros “from his duties and has suspended him without pay, effective immediately,” the office of Gov. Andrew Cuomo said in a statement released Thursday afternoon.
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The COR executives, Steven Aiello and Joseph Gerardi, are charged with orchestrating the payment of bribes to Joseph Percoco, the former executive deputy secretary to Gov. Cuomo, Preet Bharara, the U.S. Attorney for the Southern District of New York, said in a news release on the website of the U.S. Department of Justice website.
Bharara also discussed the charges in a noon-hour news conference in Manhattan.
The schemes
In the first scheme, Percoco is accused of “soliciting and accepting” more than $315,000 in bribes in return for taking official state action to benefit COR Development and an energy company.
As part of this scheme, Aiello and Gerardi along with Peter Galbraith Kelly, Jr., an executive at the energy company, are charged with orchestrating the payment of bribes to Percoco.
“In return for at least $35,000 in bribe payments, Prococo allegedly helped [COR] in its dealings with the Empire State Development Corporation, helped free up millions of dollars in state funds to be paid to the company, and even got Aiello’s son, who worked in the governor’s office, a raise,” Bharara said in detailing the federal complaint during the announcement in Manhattan.
In the second scheme, Aiello and Gerardi, along with Louis Ciminelli, Michael Laipple, and Kevin Schuler, who are executives at a Buffalo–based development company, LPCiminelli, are charged with paying hundreds of thousands of dollars in bribes to Todd Howe, a consultant who Kaloyeros had hired to help administer the state’s “Buffalo Billion” initiative and related programs.
As the charges allege, in exchange for the bribe payments, Howe and Kaloyeros “secretly rigged” the bids on lucrative state-funded contracts to ensure that COR Development and LPCiminelli would win the contracts.
All eight defendants charged in the complaint were arrested Thursday morning. Aiello and Gerardi appeared in federal court in Syracuse. Percoco, Kelly, and Kaloyeros appeared in federal court in Manhattan, Bharara’s office said.
In addition, Howe has already pleaded guilty in connection with his participation in both corruption schemes.
Howe is cooperating with the federal government, Bharara’s office said.
Besides the federal charge, Kaloyeros and the owner of an Albany–based development company are facing state charges “for a scheme to rig the bidding process for three multimillion-dollar contracts,” the office of New York Attorney General Eric Schneiderman said in a news release his office issued Thursday afternoon.
Reaction
Cuomo in his statement indicated he learned this morning of the charges filed by the U.S. Attorney’s office that include a former member of his administration.
“If the allegations are true, I am saddened and profoundly disappointed. 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… This sort of breach, if true, should be and will be punished,” said Cuomo.
He also said SUNY has “rightly” relieved Kaloyeros from his duties and has suspended him without pay.
“This matter is now in the hands of the court, which is exactly where it belongs. My administration will continue to be fully cooperative in the matter as we have been since it began,” Cuomo added in his statement.
BJNN has also sought comment from a spokesperson for COR Development Company, who didn’t respond before press time.
Following Bharara’s noon-time announcement, Onondaga County Executive Joanie Mahoney issued the following statement.
“I was surprised to hear the news about Steve Aiello and COR this morning. I have known Steve and his company to act only with integrity in the many projects that have benefited our county. I encourage the community to be patient while the process unfolds. I am reserving any further comment,” said Mahoney.
The allegations against certain individuals who are affiliated with or who have had relationships with Fort Schuyler Management Corporation and SUNY Poly are “limited” to projects in Syracuse, Buffalo, and Albany, Steven DiMeo, president of Mohawk Valley EDGE, said in a statement the organization released Thursday afternoon.
“The investments for the Quad C and Marcy Nanocenter site are not involved in this investigation and we remain confident that these projects will move forward. We will continue to work with NYS officials on the development of the Marcy Nanocenter project and build-out of the Quad C facility,” said DiMeo.
Quad-C is the computer-chip commercialization center at SUNY Poly’s Colleges of Nanoscale Science and Engineering (CNSE) in Marcy.
Albany–based Fort Schuyler Management Corporation (FSMC) is SUNY Poly-affiliated, private, nonprofit corporation that facilitates research and economic-development opportunities in support of New York’s nanotechnology and semiconductor clusters, according to its website.
Contact Reinhardt at ereinhardt@cnybj.com
