A it Case Document 49 Filed 11/22/16 Page 1 of 38 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK UNITED STATES OF AMERICA INDIC MENT v. JOSEPH PERCOCO, a/k/a ?Herb,? ALAIN KALOYEROS, a/k/a ?Dr. PETER GALBRAITH KELLY, JR., a/k/a ?Braith,? STEVEN AIELLO, JOSEPH GERARDI, LOUIS CIMINELLI, MICHAEL LAIPPLE, and KEVIN SCHULER, Defendants. OVERVIEW 1. As described more fully bel w, the charges in this Indictment stem from two wide?ranging and overlapping criminal schemes involving bribery, corrup ion, and fraud in the award of hundreds of millions of dollars i New York State (the ?State") contracts and other official bene its. The first scheme concerned the payment of hundreds thousands of dollars as directed by STEVEN AIELLO, JOSEPH GERAR I, LOUIS CIMINELLI, MICHAEL LAIPPLE, and KEVIN SCHULER, the de endants, to Todd Howe, who, among other things, was an agenj and representative of SUNY Polytechnic Institute Poly? a State?funded JUDGE CAPHONI Case Document 49 Filed 11/22/16 Page 2 of 38 I i public university. In exchange, Howe workedfwith ALAIN KALOYEROS, a/k/a ?Dr. the defendant, who was the head of SUNY Poly, to secretly rig the bidding proce for State contracts worth hundreds of millions of doll rs in favor of the companies owned and managed by AIELLO, GERA DI, CIMINELLI, LAIPPLE, and SCHULER. The second scheme in olved the payment of hundreds of thousands of dollars in bribes two of Howe's clients the Company run by AIELLO and GE RDI, and an energy company, for which PETER GALBRAITH KELLY, the defendant, was the head of External Affairs to JOSEPH PERCOC a/k/a ?Herb,? the defendant, who served as the Executive Depu Secretary to the Governor of the State, in exchange for PERC assistance in obtaining official State action, including enefits worth millions of dollars to the clients. RELEVANT INDIVIDUALS AND EN ITIES New York State Government and the Offi of the Governor 2. The State?s executive branc is headed by the Governor, who serves as the State?s chief xecutive, managing various State agencies, including those ch rged with overseeing economic development, environmental conser ation, transportation and energy. The Governor?s closest adviso and aides are referred to as working in the ?Executive amber.? In each year relevant to this Indictment, the governmen of the State 2 Case Document 49 Filed Page 3 of 38 I received funds from the federal government i.I excess of $10,000 per year. SUNY Poly and Fort Schuylpr 3. SUNY Poly is a public institu ion of higher education that is part of the New York State University system (the System?). The SUNY System is fun ed in part by the State, and also receives federal funds in cess of $10,000 per year. 4. In or around 2009, Fort Schu ler Management Corporation (?Fort Schuyler?) was created a a non?profit real estate corporation affiliated with SUNY Pol that could enter into contracts with private companies on SU Poly's behalf, for the purpose of carrying out development pro 'ects paid for with State funding. Fort Schuyler was governed a Board of Directors, which, among other things, was charged with selecting private companies to partner with Fort yler in SUNY Poly? related development projects. Certain pub ic funding for SUNY University of New York (the ?Research Foun ation?) which paid the salaries of many individuals associate with SUNY Poly and Fort Schuyler, including ALAIN KALOYEROS, /k/a ?Dr. the defendant, and Todd Howe (as a retained co sultant) during the times relevant to this Indictment. During ach year relevant to Poly came through the Research Foundation gor the State 3 I Case Document 49 Filed 11/2?/16 Page 4 of 38 1 this Indictment, the Research Foundation reclived more than $10,000 in federal funding. Todd Howe 5. Todd Howe has held several pu lic positions, including working for the Governor of the Strte of New York when I I the Governor was United States Secretary of Fousing and Urban Development, and for the Former Governor (t?e father of the Governor) when the Former Governor was Gove nor of New York. 6. During all times relevant to this Indictment, Howe was the president and primary employee of a government relations and lobbying firm (the ?Governmen Relations Firm?). 7. Beginning in or about 2012, owe was retained as a consultant to the College of Nanoscale Sc ence and Engineering CNSE was a public institution of higher education that was funded in part by the State. around September 2014, CNSE merged with the State University of New York Institute of Technology to become a new public university known as the SUNY Polytechnic Institute Poly?). In his role as a consultant for CNSE and SUNY Poly (hereinafter, Poly?), Howe served as a close advisor to ALAIN KA OYEROS, a/k/a ?Dr. relevant to this Indictment. Howe acted a an agent of SUNY Poly with respect to, among other things, UNY Poly?s the defendant, who was the head of Poly at all times 4 Case Document 49 Filed 11/25 /16 Page 5 of 38 development projects, including large, State funded development projects in Syracuse and Buffalo, New York. IHowe also served as a primary liaison between SUNY Poly and the overnor?s senior staff. 8. At various times relevant to his Indictment, Howe also was retained by and received payme ts from a large real estate development firm located in Syracuse, New York (the ?Syracuse Developer"); a large Buffalo?based construction and development company (the ?Buffalo Devel per?); and a privately?owned electric power generation velopment and asset management company (the ?Energy Company?). ALAIN KALOYEROS 9. ALAIN KALOYEROS, a/k/a ?Dr. the defendant, served as the head of SUNY Poly at all time relevant to this Indictment. KALOYEROS also served as a memb of the Board of Directors of Fort Schuyler. KALOYEROS sele ted and provided direction to Fort Schuyler?s officers and hers working on behalf of Fort Schuyler. I STEVEN AIELLO, JOSEPH GERARDI, and the Syracuse Developer 10. At all times relevant to thi; Indictment, the Syracuse Developer, through various corpor te affiliates, built, owned, and managed real estate in and arou New York State. In or around December 2013, the Syracuse Deve oper was awarded a 5 _Li? Case Document 49 Filed 11/22/16 Page 6 of 38 1 contract with Fort Schuyler to serve as the greferred developer for projects of SUNY POLY to be created in racuse, New York. This contract permitted the Syracuse Develop to be chosen for SUNY Poly development projects of any size in or around Syracuse without further competitive bidding, and, i deed, shortly thereafter, the Syracuse Developer received a contract worth approximately $15 million to build a film s?udio, and in or around October 2015, the Syracuse Developer received a contract worth approximately $90 million to build a anufacturing plant, both in Syracuse, New York. 11. STEVEN AIELLO, the defendant was a founder of the Syracuse Developer and has been its Pre ident since in or about 1998. 12. JOSEPH GERARDI, the defenda t, was a founder of the Syracuse Developer and has been its Ge eral Counsel since in or about 1998. LOUIS LAIPPLE, KE IN SCHULER, and the Buffalo Develope 13. At all times relevant to th's Indictment, the Buffalo Developer provided construction ma agement and general contracting services on various public and private projects in the State. In or around January 2014, the Buffalo Developer was named by Fort Schuyler as a preferred deve oper for projects of I Case Document 49 Filed 11/2'2/16 Page 7 of 38 SUNY Poly to be built in Buffalo, New York. 1This award permitted the Buffalo Developer to be chosen for SUNY Poly 1 development projects of any size in or aroun Buffalo without further competitive bidding, and, indeed, 2014, as a result of its position as a preferred developer, in or around March the Buffalo Developer received a contract worth approximately $225 million to build a manufacturing plant in That contract ultimately expanded to be wor million. 14. LOUIS CIMINELLI, the defenda and CEO of the Buffalo Developer, and serve times relevant to this Indictment. 15. MICHAEL LAIPPLE, the defenda of a division of the Buffalo Developer that things, on initiatives involving public?pri projects, and served in that role at all ti Indictment. 16. President for the Buffalo Developer, all times relevant to this Indictment. KEVIN SCHULER, the defendant, ffalo, New York. approximately $750 t, was the Chairman in that role at all t, was the President focused, among other ate infrastructure es relevant to this was a Senior Vice and served in that role at PETER GALBRAITH KELLY and the En rgy Company 17. about 2008, 7 As is relevant to this Indi tment, since in or the Energy Company had been wo king to develop a Case Document 49 Filed 11/22/16 Page 8 of 38 million. At 1 power plant in Wawayanda, New York (the ?NewLYork Power Plant?), that was estimated to cost approximately 1 around the same time, the Energy Company als was developing a Power Plant in New Jersey (the ?New Jersey Power Plant?). 18. At all times relevant to this Indictment, PETER GALBRAITH KELLY, JR., a/k/a ?Braith,? the fendant, was the Senior Vice President of External Affairs a the Energy Company. JOSEPH PERCOCO 19. In or about January 2011, JO EPH PERCOCO, a/k/a ?Herb,? the defendant, was appointed to be he Executive Deputy Secretary to the Governor. As Executive De uty Secretary, PERCOCO worked in the Executive Chamber and was a high?ranking, senior, and influential part of the Governo ?s Executive staff. PERCOCO also had a longstanding personal re ationship with the Governor and the Governor?s family, and was generally seen as the Governor?s ?right?hand man,? who coordinated access to the Governor and often spoke for him on a broa array of substantive and administrative matters. PERCOCO also erved as a primary ?gatekeeper? of opportunities to speak or eet with the Governor, oversaw logistics of the Governo 's events and travel, and supervised appointments and administra ive matters for the Executive Chamber. During all times relev nt to this Indictment, primary work locatio was in Manhattan, 8 Case Document 49 Filed 11/22/16 Page 9 of 38 New York, although he typically traveled to leany, New York approximately several times per month and was an almost constant presence with the Governor during the Govern r?s official duties. 20. On or about April 21, 2014, ?Herb,? the defendant, officially left New ork State employment to serve as campaign manager for the Govern r?s reelection campaign, and returned to State employment or about December 8, 2014. However, during the time period at PERCOCO was the OSEPH PERCOCO, a/k/a manager of the Governor?s reelection campai n, he continued to function in a senior advisory and superviso role with regard to the Governor?s Office, and continued to involved in the hiring of staff and the coordination of the Governor?s official events and priorities, and to travel with Governor on official business, among other responsibili ies. PERCOCO permanently left his position as Executive eputy Secretary in or about January 2016. 21. JOSEPH PERCOCO, a/k/a ?Herb,? the defendant, has known Todd Howe since PERCOCO was a college student, when HOWE hired PERCOCO to work for the Former Gover or. THE BUFFALO BILLION FRAUD AND BR BERY SCHEME 22. As part of the first crimin scheme alleged in I Case Document 49 Filed 11/7/16 Page 10 of 38 this Indictment, Todd Howe arranged for the yracuse Developer, at the direction of STEVEN AIELLO and JOSEPH GERARDI, the defendants, and the Buffalo Developer, at th direction of LOUIS CIMINELLI, MICHAEL LAIPPLE and KEVIN SCHULER, the defendants, to obtain official State favors through Howe?s osition at SUNY Poly. More specifically, in exchange for hu dreds of thousands of dollars in payments to Howe from the Syracuse Developer and the Buffalo Developer, respectively, Howe a ALAIN KALOYEROS, a/k/a ?Dr. the defendant, devised a pla to secretly rig Fort Schuyler?s bidding process so that Sta contracts that were ultimately worth hundreds of millions dollars would be awarded to the Syracuse Developer and the ffalo Developer. 23. As part of their plan, Todd owe and ALAIN KALOYEROS, a/k/a ?Dr. the defendant, ha Fort Schuyler issue two requests for proposals (the on for Syracuse (the ?Syracuse and one for Buffalo (the ffalo that would give the appearance of an open compet'tion to choose ?preferred developers? in Syracuse and Buff lo, respectively. However, the Syracuse Developer and the Buffalo Developer had been preselected by Howe and KALOYEROS to become the preferred developers, after the Syracuse Developer a the Buffalo Developer had each made sizeable contributions to the Governor 10 Case Document 49 Filed 11/22/16 Page 11 of 38 and had begun paying Howe in exchange for Ho e?s influence over the RFP processes. These preferred develope contracts were particularly lucrative for the Syracuse Developer and the Buffalo Developer, as the Syracuse Developer and the Buffalo Developer were then entitled to be awarded ?uture development contracts of any size in Syracuse or Buffal?, respectively, without additional competitive bidding, and thus without competing on price or qualifications for pa ticular projects. 24. To carry out their criminal cheme, Todd Howe and ALAIN KALOYEROS, a/k/a ?Dr. provided se ret information concerning the Syracuse RFP and Buffalo RFP to STEVEN AIELLO, JOSEPH GERARDI, LOUIS CIMINELLI, MICHAEL LA PPLE, and KEVIN SCHULER, the defendants, including advance opies of the RFPs that were provided to no other developers, nd, in the case of the Buffalo RFP, provided CIMINELLI, LAIPPL and SCHULER with the location and purpose of the first prefe red developer project information that was provided to 0 other developer. Howe and KALOYEROS also worked with AIELLO and GERARDI to secretly tailor the Syracuse RFP to include qualifications that would favor the Syracuse Developer in Fort Schuyler?s selection process for the Syracuse and worked w'th CIMINELLI, LAIPPLE, and SCHULER to secretly tailor th Buffalo RFP to Case Document 49 Filed 11/2 /16 Page 12 of 38 include qualifications that would favor the qufalo Developer in Fort Schuyler?s selection process for the Bu falo REP. 25. As part of their criminal me, Todd Howe and ALAIN KALOYEROS, a/k/a ?Dr. STEVEN AIELL JOSEPH GERARDI, LOUIS CIMINELLI, MICHAEL LAIPPLE, and KEVIN SCHULER, the defendants, deceived and concealed material information from Fort Schuyler and its Board of Directors in the following ways, among others: falsely represen ed to Fort Schuyler that the bidding processes fOr the Syracuse RFP and the Buffalo RFP were fair, open, and competitive, when truth and in fact, KALOYEROS and Howe had predetermined that tie Syracuse Developer would be awarded the Syracuse RFP and the ffalo Developer would be awarded the Buffalo RFP. b.The Syracuse Developer fa sely certified that no one was retained, employed, or designate by or on behalf of the Syracuse Developer to attempt to influe ce the procurement process, when, in truth and in fact, the Syracuse Developer had retained Howe to influence the procurement rocess. c.The Buffalo Developer fal ely certified that no one was retained, employed, or des'gnated by or on behalf of the Buffalo Developer to attempt to influence the procurement process, when, in truth and in fact, the Buffalo 12 Case Document 49 Filed 11/22/16 Page 13 of 38 Developer had retained Howe to influence the procurement process. 26. As a result of the criminal nduct alleged herein, the Syracuse Developer was awarded 0 State contracts worth a total of approximately $l05 million, and the Buffalo Developer was awarded a State contract that was ultimately worth approximately $750 million. The PERCOCO Bribery Sche 27. The second scheme alleged in this Indictment involved Todd Howe arranging for two of his clients the Syracuse Developer and the Energy Company to pay bribes to JOSEPH PERCOCO, a/k/a ?Herb,? the defendant in exchange for use of his official position as ecutive Deputy Secretary to the Governor and his far?reach'ng influence within the Executive Chamber to provide official ate favors to the Syracuse Developer and the Energy Company millions of dollars. Receipt of Bribes from th Energy Company 28. From at least in or about 20l2 up through and including at least in or about 2016, Todd owe and PETER GALBRAITH KELLY, JR., a/k/a ?Braith,? the efendant, arranged for the Energy Company to pay more than $2 7,000 in bribes to JOSEPH PERCOCO, a/k/a ?Herb,? the defendan in exchange for 13 Case Document 49 Filed 11/2 /16 Page 14 of 38 official assistance to benefit the[Energy Company on an as?needed basis. 29. Beginning in or about 2010, TER GALBRAITH KELLY, JR., a/k/a ?Braith,? the defendant, ngan offering and providing things of value to JOSEPH ?Herb,? the defendant, in an effort to obtain official assistance on behalf of the Energy Company. Beginning in or about 2012, in response to repeated pressure from PERCOCO, KELLY arranged for the Energy Company to create a ?low-show? for wife that resulted in payment to the PERCOCOS of $7,500 per month. To conceal the nature and source of the pay ents, PERCOCO, KELLY, and Howe took the following steps, a ong others: a.A.consultant who worked the Energy Company (?Consultant-l?) was used as a pass-through to conceal the payments to the PERCOCOs. and others at KELL ?5 direction, purposefully kept wife's last nam and photograph out of certain work related documents and directed wife to refer to herself by her first name when dealing with certain individuals when doing work for the Energy company. cu KELLY falsely claimed to ther executives Case Document 49 Filed 11/2 iI16 Page 15 of 38 at the Energy Company that he had obtained ag ethics opinion from the Governor?s office approving the Ene gy Company?s arrangement with wife. d. In his required financial disclosure statements for the years 2012 and 2014, PERC CO represented that his wife was employed by a limited liabilit company in the name of Consultant?l, and did not list the Energ Company. 30. In exchange for the bribe pa ents paid through wife as directed by PETER GALBRAI KELLY, a/k/a ?Braith,? the defendant, JOSEPH PERCOCO, a/ /a ?Herb,? the defendant, agreed to take, and in fact took, official actions for the benefit of the Energy Company as th opportunity arose. Official actions taken by PERCOCO for the nefit of the Energy Company included, but were not limited to, he following: a4 PERCOCO exerted pressure and provided advice to other State officials, with the i tent that those officials secure for the Energy Company an greement between a New Jersey state agency and the New York St te Department of Environmental Conservation that would allow the Energy Company to purchase emissions credits in Ne York worth millions of dollars to the Energy Company in connection with the New Jersey Power Plant. tn PERCOCO exerted pressure and provided 15 Case Document 49 Filed 11/21/16 Page 16 of 38 I 1 advice to other State offiCials, the in ent that those officials work to secure for the Energy Comp ny a lucrative long?term power purchase agreement (the with the State guaranteeing a buyer for the power to be produced by the New York Power Plant. 31. After JOSEPH PERCOCO, a/k/a ?Herb,? the defendant, learned that the Energy Company ould not be awarded the PPA, PERCOCO worked with Todd Howe to ntinue to extort payments from the Energy Company by promisi KELLY that PERCOCO would continue to take official action to lp the Energy Company obtain the PPA and taking steps to ake KELLY believe PERCOCO was continuing to take such action. Receipt of Bribes from the S-racuse Developer 32. From at least in or about Au ust 2014 up through and including at least in or about October 014, Todd Howe arranged for the Syracuse Developer to pay pproximately $35,000 in bribe payments to JOSEPH PERCOCO, a/k/a ?Herb,? the defendant, in exchange for official assistance to the Syracuse Developer on an as?needed basis. 33. To conceal the nature and urce of the payments, the Syracuse Developer and Todd Howe arran ed to pay JOSEPH PERCOCO, a/k/a ?Herb,? the defendant, thro gh a shell company controlled by Howe. 16 Case Document 49 Filed 11/2 i/16 Page 17 of 38 34. In exchange for the bribe pay ents paid to JOSEPH PERCOCO, a/k/a ?Herb,? the defendant, by STE EN AIELLO and JOSEPH GERARDI, the defendants, through Todd Howe?s shell company, PERCOCO agreed to take, and in fact took, official actions for the benefit of the Syracuse Deve oper as the opportunity arose. Official actions taken by PERCOCO for the benefit of the Syracuse Developer included, but were not limited to, the following: exerted pressure 0 and provided advice to other State officials, with the i tent that those officials reverse an adverse decision by th Empire State Development Corporation, which is the State main economic development agency, that would have require the Syracuse Developer to enter into a costly agreement ith labor unions. tr PERCOCO exerted pressure and provided advice to other State officials, with the i tent that those officials secure the release of millions Of dollars in State funds that were owed to the Syracuse Develo er. exerted pressure and provided advice to other State officials, with the intent that those I officials secure a raise for the son of ST VEN AIELLO, the defendant, who worked in the Executive Cha ber. 1 Case Document 49 Filed 11/2 [/16 Page 18 of 38 COUNT ONE (Wire Fraud Conspiracy The Preferred Developer RFPs) The Grand Jury further charges: 35. The allegations contained in aragraphs 1 through 34 above are hereby repeated, realle ed, and incorporated by reference as if fully set forth herein. 36. From at least in or about 2013, up to and including in or about 2015, in the Southern District of New York and elsewhere, ALAIN KALOYEROS, a/k/a ?Dr. STEVEN AIELLO, JOSEPH GERARDI, LOUIS CIMINELLI, MICHAEL LA PPLE, and KEVIN SCHULER, the defendants, and others known a unknown, willfully and knowingly did combine, conspire, confed rate, and agree together and with each other to commit wire fraud in violation of Section 1343 of Title 18, United States ode. 37. It was a part and an object the conspiracy that ALAIN KALOYEROS, a/k/a ?Dr. STEVEN AIELLO, JOSEPH GERARDI, LOUIS CIMINELLI, MICHAEL LAIPPLE, and KEVIN SCHULER, the defendants, and others known and unkno n, willfully, and knowingly, having devised and intending to devise a scheme and artifice to defraud, and for obtaining mon and property by means of false and fraudulent pretenses, presentations, and promises, would and did transmit and cause to be transmitted by means of wire and radio communication in i terstate and foreign 18 I Case Document 49 Filed 11/21/16 Page 19 of 38 commerce, writings, signs, signals, pictures} and sounds for the purpose of executing such scheme and artific in violation of Title 18, United States Code, Section 1343, wit, KALOYEROS, AIELLO, GERARDI, CIMINELLI, LAIPPLE, SCHULER and their co- conspirators, devised a scheme to defraud Fo Schuyler in its award of significant taxpayer?funded develop ent contracts by representing to Fort Schuyler that the biddi process for those contracts was fair, open, and competitive, when, in truth and in fact, KALOYEROS and Todd Howe used their of icial positions to secretly tailor the requests for proposals for those contracts so that companies that were owned, controlled, and managed by AIELLO, GERARDI, CIMINELLI, LAIP LE, and SCHULER would be favored to win in the selection pr cess for the contracts. I (Title 18, United States Code, Se tion 1349.) COUNT TWO (Wire Fraud The Syracuse RFP) The Grand Jury further charges: 38. The allegations contained in paragraphs 1 through 34 above are hereby repeated, realleged, and incorporated by reference as if fully set orth herein. 39. From in or about 2013, up and including in or A Case Document 49 Filed 11/2 ?/16 Page 20 of 38 about 2015, in the Southern District of New ?ork and elsewhere, ALAIN KALOYEROS, a/k/a ?Dr. STEVEN AIELL and JOSEPH GERARDI, the defendants, willfully and knowi gly, having devised and intending to devise a scheme and artific to defraud, and for obtaining money and property by means of false and fraudulent pretenses, representations, and omises, did transmit and cause to be transmitted by mean of wire and radio communication in interstate and foreign comm rce, writings, signs, signals, pictures, and sounds for the purpose of executing such scheme and artifice, to wit, KALOYEROS, AIELLO, and GERARDI devised a scheme to defraud For Schuyler in its award of the Syracuse RFP by representing t1 Fort Schuyler that the bidding process for that contract was ir, open, and competitive, when, in truth and in fact, an as AIELLO and GERARDI well knew, KALOYEROS and Todd Howe sed their official positions to secretly tailor the RFP for th Syracuse Preferred Developer contract so that the Syracuse Dev loper would be favored to win in the selection process for the contract. (Title 18, United States Code, Secti ns 1343 and 2.) COUNT THREE (Payments of Bribes and Gratuities he Syracuse RFP) The Grand Jury further charges: 40. The allegations contained i paragraphs 1 20 1 Case Document 49 Filed 11/21/16 Page 21 of 38 through 34 above are hereby repeated, realle?ed, and incorporated by reference as if fully set fo th herein. 41. From at least in or about 201 to at least in or about 2015, in the Southern District of New ork and elsewhere, knowingly did corruptly give, offer, and agree to give a thing of value to a person, with intent to influe ce an agent of a State government agency in connection with usiness, STEVEN AIELLO and JOSEPH GERARDI, the dcfen%fnts, willfully and transactions, and series of transactions of such State agency involving a thing of value of $5,000 and mo e, while such government and agency was in receipt of, in any one year period, benefits in excess of $10,000 under a Feder 1 program involving a grant, contract, subsidy, loan, guarantee insurance, and other form of Federal assistance, to wit, A ELLO and GERARDI paid bribes to Todd Howe in exchange for, influence, and to reward the taking of official action in his capacity as an agent and representative of SUNY Poly, in connection with obtaining the Syracuse RFP. (Title 18, United States Code, Sections 066(a)(2) and 2.) COUNT FOUR (Wire Fraud The Buffalo RFP) The Grand Jury further charges: 42. The allegations contained i? paragraphs 1 21 I I Case Document 49 Filed 11/22/16 Page 22 of 38 through 34 above are hereby repeated, realle ed, and incorporated by reference as if fully set fo th herein. 43. From in or about 2013, up to nd including in or about 2015, in the Southern District of New Fork and elsewhere, ALAIN KALOYEROS, a/k/a ?Dr. LOUIS CIMINE LI, MICHAEL LAIPPLE, and KEVIN SCHULER, the defendants, tillfully and knowingly, having devised and intending to dFvise a scheme and artifice to defraud, and for obtaining moneyrand property by means of false and fraudulent pretenses, re resentations, and promises, did transmit and cause to be tran mitted by means of wire and radio communication in interstate nd foreign commerce, writings, signs, signals, pictures, and sou ds for the purpose of executing such scheme and artifice, to t, KALOYEROS, CIMINELLI, LAIPPLE, and SCHULER devised a heme to defraud Fort Schuyler in its award of the Buffalo RFP by representing to Fort Schuyler that the bidding process for those contracts was fair, open, and competitive, when, in truth and i fact, and as CIMINELLI, LAIPPLE, and SCHULER well knew, KALOYEROS and Todd Howe secretly used their official positions to tailor the RFP for the Buffalo Preferred Developer contract so that the Buffalo Developer would be favored to win in the selection process for the contract. (Title l8, United States Code, Secti ns 1343 and 2.) I 22 Case Document 49 Filed 11/2216 Page 23 of 38 COUNT FIVE (Payments of Bribes and Gratuities Buffalo RFP) The Grand Jury further charges: 44. The allegations contained in aragraphs through 34 above are hereby repeated, realleged, and incorporated by reference as if fully set forth herein. 45. From at least in or about 2013 to at least in or about 20l5, in the Southern District of New LOUIS CIMINELLI, MICHAEL LAIPPLE, and KEVIN defendants, willfully and knowingly did cor and agree to give a thing of value to a per influence an agent of a State government ag with business, transactions, and series of State agency involving a thing of value of while such government and agency was in rec year period, benefits in excess of $10,000 program involving a grant, contract, subsid insurance, and other form of Federal assist CIMINELLI, LAIPPLE, and SCHULER paid bribes York and elsewhere, SCHULER, the uptly give, offer, on, with intent to ncy in connection ransactions of such 5,000 and more, ipt of, in any one nder a Federal loan, guarantee, nce, to wit, to Todd Howe in exchange for, to influence, and to reward the taking of official action in his capacity as an agent and rep esentative of SUNY Poly, in connection with obtaining the Buf alo RFP. (Title 18, United States Code, Section 23 666(a)(2) and 2.) Case Document 49 Filed 11/22/16 Page 24 of 38 COUNT SIX 3 (Conspiracy to Commit Extortion Under Colo of Official Right) The Grand Jury further charges: 46. The allegations contained in aragraphs 1 through 34 above are hereby repeated, realleged, and incorporated by reference as if fully set forth herein. 47. From at least in or about 2012, up to and including in or about 2016, in the Southern District of New York and elsewhere, JOSEPH PERCOCO, a/k/a ?Herb,? the defendant, while serving in the Office of the Governor, and others known and unknown, willfully and knowingly did co bine, conspire, confederate, and agree together and with ea other to commit extortion as that term is defined in Title 8, United States Code, Section l951(b)(2), that is, by obtai ing cash payments from the Energy Company and the Syracuse De eloper, with their consent, such consent having been induced der color of official right, and thereby did obstruct, lay, and affect commerce, as that term is defined in Title H8, United States Code, Section l951(b)(3), to wit, PERCOCO w%uld and did cause companies with business before the State namely, the Energy Company and the Syracuse Developer to di ect payments to PERCOCO in exchange for official actions ken or to be taken by PERCOCO for the benefit of the companies ying him. 24 Case Document 49 Filed 11/22/16 Page 25 of 38 I (Title 18, United States Code, sect?ons 1951). COUNT SEVEN (Extortion Under Color of Official Right The Energy Company) The Grand Jury further charges: 48. The allegations contained in aragraphs 1 through 34 above are hereby repeated, realleged, and incorporated by reference as if fully set forth herein. 49. From at least in or about 2012, up to and including in or about 2016, in the Southern District of New York and elsewhere, JOSEPH PERCOCO, a/k/a ?Herb,? the defendant, while serving in the Office of the Governor, willfully and knowingly, did commit extortion as that ter is defined in Title 18, United States Code, Section 1951(b)(2), that is, by obtaining cash payments from the Energy Com any, with its consent, such consent having been induced der color of official right, and thereby did obstruct, lay, and affect commerce, as that term is defined in Title 8, United States Code, Section 1951(b)(3), to wit, PERCOCO ed his official State position and power and authority within the Office of the Governor to cause the Energy Company to ma and direct payments to wife in exchange for official actions taken and agreed to be taken by PERCOCO. 25 Case Document 49 Filed Page 26 of 38 I (Title 18, United States Code, Sectio 1951 and 2). COUNT EIGHT (Extortion Under Color of Official Righ - The Syracuse Developer) The Grand Jury further charges: 50. The allegations contained in aragraphs 1 through 34 above are hereby repeated, realleged, an incorporated by reference as if fully set forth herein. 51. From at least in or about 20 4, up to and including in or about 2015, in the Southern District of New York and elsewhere, JOSEPH PERCOCO, a/k/a ?Herb,? the defendant, while serving in the Office of the Governor, willfully and knowingly, did commit extortion as that ter is defined in Title 18, United States Code, Section 1951(b)(2), that is, by obtaining cash payments from the Syracuse veloper, with its consent, such consent having been induced der color of official right, and thereby did obstruct, lay, and affect commerce, as that term is defined in Title 18, United States Code, Section 1951(b)(3), to wit, PERCOCO used his official State position and power and authority wit in the Office of the actions taken and Governor to cause the Syracuse Developer make and direct payments to PERCOCO in exchange for offici agreed to be taken by PERCOCO. 26 Case Document 49 Filed 11/22/16 Page 27 of 38 (Title 18, United States Code, Sections 1951 and 2.) COUNT NINE (Conspiracy to Commit Honest Serv'ces Fraud) The Grand Jury further charges: 52. The allegations contained in aragraphs 1 through 34 above are hereby repeated, realleged, and incorporated by reference as if fully set forth herein. 53. From at least in or about 2012, up to and including in or about 2015, in the Southern District of New York and elsewhere, JOSEPH PERCOCO, a/k/a ?Herb,? PETER GALBRAITH KELLY, JR., a/k/a ?Braith,? STEVEN AIELLO, nd JOSEPH GERARDI, the defendants, Todd Howe, and others known and unknown, willfully and knowingly did combine, conspi e, confederate and agree together and with each other to viola Title 18, United States Code, Sections 1343 and 1346. 54. It was a part and an object the conspiracy that JOSEPH PERCOCO, a/k/a ?Herb,? PETER GA BRAITH KELLY, JR., a/k/a ?Braith,? STEVEN AIELLO, and JOSEPH RARDI, the defendants, Todd Howe, and others known and unknown, willfully and knowingly, having devised and intending to devise a scheme and artifice to defraud, and to deprive the public of its intangible right to PERCOCO's honest servi es as a senior official in the Office of the Governor, wo ld and did transmit 27 Case Document 49 Filed ll/2T/l6 Page 28 of 38 and cause to be transmitted by means of wiregcommunication in interstate and foreign commerce, writings, s'gns, signals, pictures, and sounds for the purpose of exec ting such scheme and artifice, in violation of Title 18, Unit States Code, Sections 1343 and 1346, to wit, PERCOCO, while serving as Executive Deputy Secretary to the Governor, would and did take official action in exchange for bribes paid at the direction of KELLY, AIELLO, and GERARDI. (Title 18, United States Code, Se tion 1349.) COUNT TEN (Solicitation of Bribes and Gratuities fro The Energy Company) The Grand Jury further charges: 55. The allegations contained in paragraphs 1 through 34 above are hereby repeated, realleged, an incorporated by reference as if fully set forth herein. 56. From at least in or about 20 2, up to and, including in or about 2016, in the Southern District of New York and elsewhere, JOSEPH PERCOCO, a/k/a ?Herb,? the defendant, being an agent and representative of a State government, to wit, a senior official in the Office of the Governor, corruptly solicited and demanded for the benefit of person, and accepted and agreed to accept, a thing of value fro a person, intending to be influenced and rewarded in connectio with a business, 28 Case Document 49 Filed 11/2 /16 Page 29 of 38 transaction, and series of transactions of sich government involving a thing of value of $5,000 and mor while such government was in receipt of, in any one yea period, benefits in excess of $10,000 under a Federal program involving a grant, contract, subsidy, loan, guarantee, insuranc and other form of Federal assistance, to wit, PERCOCO solicited and accepted cash and things of value from the Energy Company in exchange for official actions by PERCOCO and with the in ent that PERCOCO be influenced and rewarded. (Title 18, Unite States Code, Sections 6 and 2.) COUNT ELEVEN (Solicitation of Bribes and Gratuities from the Syracuse Developer) The Grand Jury further charges: 57. The allegations contained in paragraphs 1 through 34 above are hereby repeated, realleged, an incorporated by reference as if fully set forth herein. 58. From at least in or about 20 4, up to and including in or about 2015, in the Southern District of New York and elsewhere, JOSEPH PERCOCO, a/k/a ?Herb,? the defendant, being an agent and representative of a State government, to wit, a senior official in the Office of the Gov rnor, corruptly solicited and demanded for the benefit of person, and accepted A Case Document 49 Filed 11/2 1/16 Page 30 of 38 and agreed to accept, a thing of value from I person, intending to be influenced and rewarded in connection ith a business, transaction, and series of transactions of 3 ch government involving a thing of value of $5,000 and mor while such government was in receipt of, in any one yea period, benefits in excess of $10,000 under a Federal program involving a grant, contract, subsidy, loan, guarantee, insurance, and other form of Federal assistance, to wit, PERCOCO solicited and accepted cash and things of value from the Syracuse Devel per in exchange for official actions by PERCOCO and with the in ent that PERCOCO be influenced and rewarded. (Title 18, United States Code, Sections 666(a)(l)(B) and 2.) COUNT TWELVE (Payments of Bribes and Gratuities - Energy Company) The Grand Jury further charges: 59. The allegations contained in paragraphs 1 through 34 above are hereby repeated, realleged, an incorporated by reference as if fully set forth herein. 60. From at least in or about 2012 to at least in or about 2016, in the Southern District of New York and elsewhere, PETER GALBRAITH KELLY, JR., a/k/a ?Braith,? the defendant, who was an executive at the Energy Company, willfully and knowingly did corruptly give, offer, and agree to gi a thing of value to 30 Case Document 49 Filed 11/22/16 Page 31 of 38 I a person, with intent to influence an agent if a State government, in connection with business, tra sactions, and series of transactions of such government, 1 volving a thing of value of $5,000 and more, while such govern?ent was in receipt of, in any one year period, benefits in excess of $10,000 under a Federal program involving a grant, contra t, subsidy, loan, guarantee, insurance, and other form of Fed ral assistance, to wit, KELLY paid JOSEPH PERCOCO, a/k/a ?Herb,? the defendant, in exchange for, to influence, and to reward taking of official action to benefit the Energy Company, inclu ing to advance the development of the New York and New Jersey ower Plants. (Title 18, United States Code, Sections 666(a)(2) and 2.) COUNT THIRTEEN (Payments of Bribes and Gratuities The Syracuse Developer) The Grand Jury further charges: 61. The allegations contained in paragraphs 1 through 34 above are hereby repeated, realleged, and incorporated by reference as if fully set forth herein. 62. From at least in or about 2014 to at least in or about 2015, in the Southern District of Ne York and elsewhere, STEVEN AIELLO and JOSEPH GERARDI, the defedants, who were executives at the Syracuse Developer, will ully and knowingly did corruptly give, offer, and agree to gi a thing of value to 31 Case Document 49 Filed 11/223716 Page 32 of 38 a person, with intent to influence an agent of a State government, in connection with business, tra sactions, and series of transactions of such government, i volving a thing of value of $5,000 and more, while such governm nt was in receipt of, in any one year period, benefits in excess of $10,000 under- a Federal program involving a grant, contract, subsidy, loan, guarantee, insurance, and other form of Fed ral assistance, to wit, AIELLO and GERARDI paid JOSEPH PERCOCO, a/k/a ?Herb,? the defendant, in exchange for, to influence, a to reward the taking of official action to benefit the Sy acuse Developer, including advancing its development project in the State. (Title 18, United States Code, Sections 666( and 2.) COUNT FOURTEEN (False Statements to Federal fficers) The Grand Jury further charges: 63. The allegations contained in paragraphs 1 through 34 above are hereby repeated, realleged, an incorporated by reference as if fully set forth herein. 64. On or about June 21, 2016, in the Southern District of New York and elsewhere, STEVEN AIELLO and JOSEPH GERARDI, the defendants, willfully and kno ingly did make materially false, fictitious, and fraudule statements and representations in a matter within the jur sdiction of the 32 Case Document 49 Filed 11/22/16 Page 33 of 38 executive branch of the Government of the Un ted States, to wit, AIELLO and GERARDI, while meeting with feder agents and representatives of the United States Attorne ?8 Office for the Southern District of New York, each made sta ements denying involvement in paying JOSEPH PERCOCO, a/k/a ?Herb, the defendant, and in tailoring a request for proposal for the benefit of their company, the Syracuse Deve oper, when, in truth and in fact, AIELLO and GERARDI directed pa ents to PERCOCO and conspired to tailor a request for proposal or the benefit of their company. (Title 18, United States Code, Secti 1001( FORFEITURE ALLEGATIONS 65. As the result of committing he offenses charged in Counts One through Thirteen of this Indi tment, JOSEPH PERCOCO, a/k/a ?Herb,? ALAIN KALOYEROS, a/k a ?Dr. PETER GALBRAITH KELLY, JR., a/k/a ?Braith, STEVE AIELLO, JOSEPH GERARDI, LOUIS CIMINELLI, MICHAEL LAIPPLE, and KEVIN SCHULER, the defendants, shall forfeit to the Unite States, pursuant to Title 18, United States, Code, Section 981( (C and Title real and personal, that constitutes or is erived from proceeds traceable to the commission of said offens 28, United States Code, Section 2461( and all property, including but not limited to a sum of money in United Statesl:urrency representing 33 Case Document 49 Filed 11/22/16 Page 34 of 38 the amount of proceeds traceable to the of said offenses. Substitute Asset Provisi 66. If any of the above?described forfeitable property, as a result of any act or omission of the defendants: a. cannot be located upon the exercise of due diligence; b. has been transferred or sold to, or I deposited with, a third person; c. has been placed beyond he jurisdiction of the Court; d. has been substantially iminished in value; or e. has been commingled wit other property that cannot be subdivided without difficulty; it is the intent of the United States, purs ant to Title 21, United States Code, Section 853(p), and Title 28, United States Code, Section 2461(c), to seek forfeiture of any other property 34 Case Document 49 Filed 11/22/16 Page 35 of 38 of said defendant up to the value of the aboTe forfeitable property. (Title 18, United States Code, Sections 98 Title 21, United States Code, Section 853(p); Title 28, ited States Code, Section 2461.) 721.ng FOREPE PREET United St tes Attorney 35 I Case Document 49 Filed 11/22/16 Page 36 of 38 1 Form No. (Ed 9? 5? 58) UNITED STATES DISTRICT CO SOUTHERN DISTRICT OF NEW RK UNITED STATES OF 1 JOSEPH PERCOCO, a/k/a ?He ALAIN KALOYEROS, a/k/a ?Dr. PETER GALBRAITH KELLY, JR., a/k/a ?Braith,? STEVEN JOSEPH GERARDI, LOUIS CIMINELLI, MICHAEL LAIP LE, and SCHULER Defendants. INDICTMENT 16 Cr. (18 U.S.C. Sections 1951, 134 1343, 666(a)(2), 1001( and 2.) 1 PREET BHARARA United States Attorney. 140V.991w (YA (J 9Tb . Case Document 49 Filed 11/22/16 Page 37 of 38 Case Document 49 Filed 11/22/16 Page 38 of 38