NEW YORK (Reuters) – Federal prosecutors on Thursday announced charges against nine men, including two former advisers to New York Governor Andrew Cuomo, in a corruption and fraud case involving state contracts worth hundreds of millions of dollars.
The charges followed a federal investigation into Buffalo Billion, a signature $1 billion economic development project by Cuomo aimed at revitalizing the area around the one-time industrial powerhouse city of Buffalo.
Joseph Percoco, a former executive deputy secretary to the governor, and Alain Kaloyeros, State University of New York (SUNY) Polytechnic Institute’s president, were among eight people charged on Thursday in a criminal complaint filed in Manhattan federal court.
Prosecutors also said Todd Howe, a lobbyist and a former strategic adviser to Cuomo when he was secretary of the U.S. Department of Housing and Urban Development, pleaded guilty to charges filed on Tuesday and is cooperating with the investigation.
New York Attorney General Eric Schneiderman is expected to announce state court charges against Kaloyeros and another defendant in a separate case involving a construction contract, a person with direct knowledge of the matter said.
Richard Morvillo, Howe’s lawyer, said his client “will testify truthfully if called upon.”
Barry Bohrer, Percoco’s lawyer, called the prosecution “an overreach of classic proportions.” Kaloyeros’ lawyer, Michael Miller, declined to comment.
Cuomo announced the Buffalo Billion plan in 2012, saying the state would provide incentives to induce companies to come to the Buffalo area and revitalize the struggling region.
The complaint detailed two overlapping schemes involving the awarding of contracts and other state benefits.
It said one scheme involved efforts by Percoco, Cuomo’s “right-hand-man,” to obtain bribes from company executives, which he sometimes funneled through bank accounts and a shell company Howe set up.
Howe, meanwhile, arranged for more than $315,000 to be funneled to Percoco and his wife, funded by two companies for which he was consulting, the complaint said.
These included payments arranged by Peter Galbraith Kelly, a senior vice president at Competitive Power Ventures, which obtained a $100 million contract to finance a $900 million power plant, the complaint said.
Neither that company nor Kelly’s lawyer immediately responded to requests for comment.
In the second scheme, Kaloyeros, who oversaw a grant application process for Buffalo Billion and similar programs, hired Howe to help develop projects and locate developers for them, the complaint said.
Howe in turn sought bribes and gratuity payments from a Syracuse real estate developer involved in the other scheme and a Buffalo-based developer, the complaint said.
(Reporting by Nate Raymond in New York; Additional reporting by Jonathan Stempel in New York; Editing by Daniel Bases)