Feds drop charge against Syracuse developer in SUNY Poly trial

NEW YORK — Federal prosecutors have dropped one of the three charges remaining against Syracuse-area developer Steven Aiello in the upcoming bid-rigging trial of former SUNY Polytechnic Institute CEO and founding president Alain Kaloyeros.

The superseding indictment, filed Saturday, dropped the charge of making a false statement to federal agents. Aiello, CEO of COR Development, still faces charges of wire fraud and conspiracy to commit wire fraud at the trial, which is scheduled to begin June 18.

The dropped charge against Aiello is another in a series of events that has shrunk the trial in scope as the court date approaches. On May 25, prosecutors dropped bribery charges against Aiello as well as codefendants Joseph Gerardi of COR as well as Louis Ciminelli and Michael Laipple of Buffalo-based LPCiminelli — all of whom had been charged with bribing Todd Howe, a consultant at the center of the sprawling upstate development scandal.

Prosecutors subsequently dropped all charges against Laipple, who is not expected to testify. A third LPCiminelli executive, Kevin Schuler, pleaded guilty on May 18 to wire fraud and conspiracy to commit wire fraud, and agreed to cooperate with prosecutors.

The trial of Aiello, Kaloyeros and Ciminelli will be the second of this year's two significant proceedings before U.S. District Judge Valerie Caproni in which a former top associate of Gov. Andrew Cuomo will be called to answer for alleged corruption. The first trial, which ended in March, included the conviction of former top Cuomo aide Joseph Percoco, who is scheduled to be sentenced in late July.

Prosecutors contend that Kaloyeros, with the help of Howe, favored developers in Buffalo and Syracuse in a corrupt scam to award them hundreds of millions of dollars in state contracts. Kaloyeros wielded considerable control over projects overseen by Fort Schuyler Development Corp., a nonprofit arm of the SUNY school that received substantial state funding.

Aiello and Gerardi, the COR Development executives, were also charged in that case. Aiello was convicted of conspiracy to commit honest services wire fraud, while Gerardi was acquitted.

On Sunday, Aiello’s attorney, Steven Coffey, said the dropped charge revealed with the indictment Saturday showed that his client had not lied about the events that led up to the indictment, and the government did not want his story presented to the jury.

“There’s no other way to interpret this,” Coffey said.

Aiello’s conviction during the Percoco trial was largely based on the testimony of Howe, who worked as a SUNY Poly consultant while also working as a consultant for developers indicted in the case.

Howe will not testify in the upcoming trial. Early in his cross-examination in the Percoco trial, Howe was forced to admit that he had attempted to defraud his credit card company of the cost of a stay at the Waldorf Astoria hotel. That admission was an apparent violation of a cooperation agreement he had signed just weeks before that required him to stop committing crimes. He remains in custody at the Metropolitan Correctional Center in New York.

While working as SUNY Poly's consultant, Howe allegedly took payment from the businessmen in exchange for influence over the request-for-proposal or RFP process and information that was not available to competing developers.

In September 2016, then-Manhattan U.S. Attorney Preet Bharara announced corruption charges against eight defendants, a criminal complaint that was ultimately split into two trials. The first, held earlier this year, focused on the links between Percoco, Aiello, Howe and a fourth man, Peter Galbraith Kelly of Competitive Power Ventures, which is developing a controversial natural gas-fired power plant in Orange County.

After the trial, Kelly admitted to one count of conspiracy to commit wire fraud.