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NY Official Pleads Guilty to $750M Bid-Rigging

Monday, June 11, 2018

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A top executive of Buffalo, New York, general contracting firm LPCiminelli has pleaded guilty to fraud and conspiracy for his part in an alleged bid-rigging scheme involving hundreds of millions of dollars.

Kevin C. Schuler, the former vice president of the firm, admitted to the felony charges late last month before U.S. District Judge Valerie Caproni in Manhattan. His trial would have been later in June, and prosecutors have agreed to drop a charge of bribery as long as he continues to cooperate.

"Based on additional investigation, the government believes that there is not a sufficient factual basis to proceed to trial against the defendant on the count, and therefore will move at sentencing to dismiss," U.S. Attorney Geoffrey S. Berman said.

The Case

LPCiminelli President Louis P. Ciminelli and Michael W. Laipple, another top executive, were accused in 2016 of making payoffs to former a former aide of Gov. Andrew Cuomo, Todd Howe, to make the firm the state’s “preferred developer” for part of Cuomo’s “Buffalo Billion” plan.

That program is concentrating on parts of western New York around Buffalo that have been lagging in development. Allegedly, LPCiminelli officials rigged the bid for a $750 million factory that is now home to Tesla.

Part of Schuler’s agreement indicates that he will participate in the trial of Ciminelli and Laipple, which is slated for June 11. (Prosecutors have petitioned to push back the trial, in light of Schuler's agreement.)

"It is understood that Schuler ... shall cooperate fully with this office, the Federal Bureau of Investigation, and any other law enforcement agency designated by this office," according to court papers.

The Buffalo News reports that Schuler is expected to remain free on bail conditions that were made in October 2016, when he was first charged, which includes a $50,000 bond. He could still face three years in prison, a $250,000 fine and other financial penalties, but his cooperation now will play a part in his sentencing.

   

Tagged categories: Bidding; Ethics; Fraud; Good Technical Practice; Laws and litigation; Lawsuits; North America

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