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Federal prosecutors scramble to plug hole in Kaloyeros bid-rigging trial

Former SUNY official Alain Kaloyeros arrives at a

Former SUNY official Alain Kaloyeros arrives at a federal courthouse in Manhattan for his trial on July 2. Credit: Charles Eckert

Prosecutors in the upstate bid-rigging trial of former SUNY official Alain Kaloyeros and three developers spent Monday in Manhattan federal court scrambling to plug a hole in their case before jurors were sent home for the rest of the July 4 holiday week.

After resting last week, prosecutors realized a key technical element of a wire fraud charge — an interstate call or email touching the judicial district where Manhattan is located — was missing, and U.S. District Judge Valerie Caproni let them reopen their case to try to prove it.

The judge, rebuffing defense complaints, told jurors the government rested “prematurely,” and let them offer new email and phone records, testimony from representatives of AOL and Verizon, and swipe card records from government offices in Manhattan to try to provide the missing piece.

Caproni said the prosecutors weren’t the first to have a “whoops moment,” but she wasn’t sure the new evidence would convince jurors a case of alleged scheming between Kaloyeros in Albany and Syracuse and Buffalo developers had enough Manhattan contacts to provide “venue” downstate.

“I think it’s weak,” the judge said. “Maybe the jury will buy it. Maybe they won’t…. It should be interesting.”

Kaloyeros, 62, of Slingerlands, the physicist credited with sparking a tech-based economic revival in Albany through SUNY Polytechnic Institute, is accused of steering nearly $1 billion in projects from Gov. Andrew M. Cuomo’s “Buffalo Billion” economic development plan to favored developers.

He allegedly schemed with former lobbyist and Cuomo aide Todd Howe to give the inside track to co-defendants Joseph Gerardi and Steven Aiello of Syracuse’s COR Development and Buffalo builder Louis Ciminelli. Howe worked for Kaloyeros and the developers, who were Cuomo donors.

Howe, a cooperating government witness, did not testify because of credibility issues that led to his jailing after his appearance in February at the bribery trial of former Cuomo lieutenant Joe Percoco. But prosecutors in the Kaloyeros case used emails from and to Howe and statements he made to other witnesses to try to make their case.

After the government finished on Monday, defense lawyers were allowed to read jurors excerpts from Howe’s testimony at the Percoco trial to raise questions about his credibility — including passages where he admitted to bank fraud, embezzlement from his law firm, and lying repeatedly to creditors.

Caproni released the jury until July 9, when defense lawyers are expected to complete their case followed by closing arguments.

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