Supreme Court tosses Percoco, Ciminelli convictions in 'Buffalo Billion' case

The U.S. Supreme Court overturned two convictions in two cases Thursday linked to the term of former Gov. Andrew M. Cuomo, taking another step to limit public-corruption prosecutions.

The nation’s top court tossed the convictions of Joseph Percoco, the one-time top aide to Cuomo, and Louis Ciminelli, one of the contractors in the “Buffalo Billion” economic development initiative. The cases centered on illicit payments and bid-rigging to secure state contracts.

In a pair of unanimous decisions, the court essentially said instructions given to the Percoco and Ciminelli juries were erroneously broad about what it means to defraud and what constitutes graft.

Neither decision was a surprise, given the court signaled its doubts about the convictions during oral arguments in November. But it’s also the latest in a string of rulings in which the court narrowed the reach of federal public corruption laws.

Percoco, Cuomo’s former executive deputy and political enforcer, was convicted on multiple corruption counts in 2018 for receiving $300,000 in payments from developers and an energy company executive in exchange for exercising his clout with the Cuomo administration to garner permits, among other things.

He began a six-year sentence in March 2019, but was granted early release from prison in December 2021.

When the payments occurred, Percoco had left the administration to run Cuomo’s reelection campaign as a private consultant, although he later returned to his government job.

But the distinction carried in the eventual reversal.

The Supreme Court ruled Percoco’s conduct wasn’t covered by a federal law requiring “honest services” be provided to the public because he was in the private sector at the time of his actions.

Justice Samuel Alito, writing for the court in a 12-page decision, said the jury had been instructed to “determine whether he had a 'special relationship' with the government and had 'dominated and controlled' government business.”

"We conclude that this is not the proper test for determining whether a private person may be convicted of honest-services fraud, and we therefore reverse,” Alito wrote.

Further, Alito said the jury wasn’t told it was necessary to find some “relevant government personnel” acquiesced to Percoco.

Technically, the decision reversed just one of Percoco’s convictions, not all three as he’d requested. Yet because Percoco already served prison time, it’s unclear whether any other further legal action will be taken.

The Justice Department didn’t immediately comment.

Yaakov Roth, Percoco’s lawyer, hailed Thursday’s decision.

“This prosecution of Joe Percoco was an abuse of the federal fraud statutes; it blurred the fundamental line between private citizens and public officials,” Roth said in a statement issued by his law firm. “We are gratified that the court agreed with our position that he was not a public official during the relevant time period, and so he did not violate federal law by acting on behalf of private clients.”

The other case centered on Ciminelli, a Buffalo-based developer. Along with others, he was convicted of wire fraud in a separate trial that stemmed from the same federal investigation of development projects and the Cuomo administration.

Prosecutors said Ciminelli and others conspired to rig a bidding process to ensure he landed lucrative projects connected to State University of New York nanotechnology initiatives across upstate.

He’d been sentenced to a 28-month prison term.

The allegations did not involve any direct bribes but rather deceiving the board of Fort Schuyler Management Corp., a quasi-governmental entity that oversees SUNY’s nanotechnology projects.

On appeal, Ciminelli's lawyers argued prosecutors relied on an invalid legal theory of wire fraud known as “right to control.” They contended prosecutors erroneously claimed it covered instances in which a victim is deprived of economically valuable information, rather than just property interests.

The Supreme Court agreed.

“In sum, the wire fraud statute reaches only traditional property interests,” Justice Clarence Thomas wrote for the court in the unanimous decision. “The right to valuable economic information needed to make discretionary economic decisions is not a traditional property interest. Accordingly, the right-to-control theory cannot form the basis for a conviction under the federal fraud statutes.”

Ciminelli was released from prison last year when the Supreme Court agreed to hear his appeal.

Both cases had been political black eyes for Cuomo, though he’d never been accused of wrongdoing in either matter.

By Yancey Roy

yancey.roy@newsday.com@yanceyroy