Alain Kaloyeros. Photo: Seth Wenig/AP

Alain Kaloyeros, the former president of SUNY Polytechnic Institute, was sentenced to three years and six months in prison Tuesday after he was convicted earlier this year on federal charges of bid rigging in relation to state economic development projects.

Kaloyeros was accused by federal prosecutors of using a lobbyist to hand-pick developers for work on some of the state's largest economic development projects in Syracuse and Buffalo, including Gov. Andrew Cuomo's “Buffalo Billion” initiative.

The sentence is higher than attorneys for Kaloyeros wanted. Michael Miller and Reid Weingarten, partners at Steptoe & Johnson LLP who represented Kaloyeros, had asked U.S. District Judge Valerie Caproni of the Southern District of New York for a sentence of between four and 10 months in jail. Kaloyeros was also ordered to pay a fine of $100,000.

Miller and Weingarten said in a statement that they will be appealing his conviction.

“While we are entirely respectful of the jury trial system, we firmly believe that Alain Kaloyeros is an innocent man. Alain committed no crimes in connection with his work on the Buffalo Billion program in Buffalo and Syracuse,” the statement said. “He attempted at every stage to make sure that the people of the state of New York got the right contractor for the right job at the right price. Alain will be appealing his conviction.”

U.S. Attorney Geoffrey Berman said in a statement that the conviction is another example of the state's problem with corruption in the public sector. The case was initially brought by former U.S. Attorney Preet Bharara.

“Public corruption – especially at such a disconcertingly high level in Albany – contributes to the frustration and eroding faith of the people of New York in the integrity of their government,” Berman said. “We will continue to do everything within our power to ensure that funds intended for the greater good of New Yorkers will be used for just that – and not to line the pockets of influence-peddlers with high-level access.”

Kaloyeros is the latest figure to be sentenced in the scheme, which alleged that he improperly directed hundreds of millions of dollars to developers in upstate New York in exchange for favors.

The arrangement involved two key economic development contracts in Syracuse and Buffalo that Kaloyeros had a hand in five years ago. One of those projects was a $750 million solar panel factory that was part of Cuomo's “Buffalo Billion” initiative. It's owned by the state but is currently occupied by Tesla company SolarCity. The other contract was for two projects in Syracuse that were valued at more than $100 million.

Fort Schuyler Management Corp., a state entity that awards state government contracts, was responsible for the bidding process on those projects. Kaloyeros, as head of SUNY Polytechnic, was in charge of overseeing the application process for those bids.

Kaloyeros hired a lobbyist, Todd Howe, to solicit bids from Buffalo developer LPCiminelli and Syracuse developer COR Development, prosecutors said. Those developers were ultimately selected for the projects by Fort Schuyler Management. Howe plead guilty to his involvement in the schemes in 2016.

Prosecutors presented evidence at trial that linked Kaloyeros to the bid-rigging effort, including a draft version of the request for proposals document sent to the Syracuse developer. The draft was sent back to Kaloyeros with edits that would favor the developer, which Kaloyeros applied.

The initial RFP for the Buffalo factory included a line that required the chosen developer to have 50 years of experience in the Buffalo area, which was a characteristic that LPCiminelli had used in its own promotional materials. That was referred to as a “typographical error” before it was revised, prosecutors said.

The two developers, in turn, made large campaign contributions to Cuomo, prosecutors said. The scheme was allegedly arranged by Kaloyeros to curry favor with Cuomo, who has had extraordinary influence over the state's economic development programs, including investments in SUNY Polytechnic. Cuomo has not been accused of any wrongdoing by federal prosecutors.

The developers involved were recently sentenced to their own terms in federal prison, though they will have a shorter stay than Kaloyeros. Louis Ciminelli, from LPCiminelli, received two years and two months in prison earlier this month. Joseph Gerardi and Steven Aiello, both from COR Development, were sentenced to 2.5 and three years in prison, respectively.

The sentences mark a temporary reprieve for Cuomo, whose critics have tried to link him to the scheme and a separate corruption case involving his former close aide, Joseph Percoco. Percoco was recently sentenced to six years in prison for his role in a different bribery arrangement.

Tuesday's sentence isn't the end of Kaloyeros' legal troubles. Beyond his appeal in federal court, Kaloyeros is also facing criminal charges from the state Attorney General's Office in an unrelated bid-rigging scheme.

In that case, the former SUNY official is accused of three different schemes. In one, he allegedly rigged a bid in favor of a developer for a student housing project at SUNY Polytechnic. In another, he chose a developer to build a major wing of the college in exchange for a research grant. Kaloyeros' salary was tied to the amount of grants the school received, prosecutors said.

In a third scheme, prosecutors say Kaloyeros arranged a deal where a company agreed to lease space at SUNY Polytechnic in exchange for work on state contracts.

Assistant State Attorney General Christopher Baynes is leading that case. Miller and his team are also representing Kaloyeros in that matter.

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