Washington D.C. -- Arguing before the U.S. Supreme Court on Monday, federal prosecutors distanced themselves from a controversial legal theory used to convict Syracuse Cor executives Steven Aiello and Joseph Gerardi in a 2018 state corruption trial that left both with multi-year prison sentences.
But what’s next for the high-powered Syracuse developers remains unclear, as the Court typically takes several months to issue a decision.
RELATED: Syracuse Cor execs Aiello, Gerardi released from prison pending Supreme Court appeal
The country’s highest court could overturn the convictions -- either sending the case back to appellate courts or clearing the developers of criminal wrongdoing. It could also uphold the criminal bid-rigging convictions and send the developers back to federal prison. That seemed unlikely after more than an hour of legal arguments Monday morning.
Aiello and Gerardi were convicted in 2018, along with Buffalo Billion developer Louis Ciminelli, of conspiring with state officials to unfairly win contracts worth hundreds of millions of dollars.
On Monday, Ciminelli’s lawyer, Michael Dreeben, argued that the convictions should be tossed by the nation’s highest court. While not speaking for Aiello or Gerardi directly, Dreeben’s arguments applied to all of their convictions.
Prosecutors conceded before Monday’s oral arguments that the controversial theory used in the 2018 bribery trial wasn’t completely defendable. Instead, Deputy Solicitor General Eric Feigin sought to preserve the guilty verdicts based on more traditional grounds.
Dreeben, on Ciminelli’s behalf, argued that the government could not change its theory of the crime after conviction and the guilty verdicts must be overturned.
At a 2018 trial in Manhattan, jurors were told that the developers were guilty of bid-rigging if proven they had conspired with government officials to withhold potentially valuable economic information from the public that could result in economic harm. That’s called a “right to control” theory.
Because state officials had tailored economic development proposals to specific developers, the jury found that deprived public taxpayers of a fair bidding process.
But “right to control” is too broad and isn’t necessarily the best way to look at fraud, Feigin, the federal lawyer, acknowledged Monday before the Supreme Court.
Instead, he argued, Ciminelli (and by extension, Aiello and Gerardi) were guilty of fraud in a more traditional sense: taking taxpayer money under false pretenses.
Ciminelli was accused of improperly winning a $750 million contract, while Aiello and Gerardi’s contract was worth more than $100 million.
That led to a different question before the court: can the developers be guilty of fraud if taxpayers got exactly what they paid for? The developers have argued all along that no actual public harm was done because the developers built what was demanded under the contract.
In Cor’s case, the development company completed a film studio and a high-tech factory at its business park in DeWitt under contracts that totaled more than $100 million.
In other words, does the public have to suffer to prove a fraud case?
The Buffalo developer’s lawyer argued that deception doesn’t equal fraud. But the government said that the crux of the crime was the developer improperly getting hundreds of millions of taxpayer money.
In a related case, Joseph Percoco, an aide to former Gov. Andrew Cuomo, also asked the Supreme Court on Monday to overturn a bribery conviction involving his dealings with Aiello.
In that case, Percoco took Aiello’s money while officially working outside of government, as Cuomo’s campaign manager. But it was understood that he would assume an official role -- as he did -- following Cuomo’s reelection and help Aiello at that point.
The justices in that case wrestled with whether Percoco could be convicted of bribery if he took money while not officially on the government payroll.
They likened it to a judge who has been elected to the bench, but hadn’t actually been seated yet: would the judge be in position to give court staff orders? Or would the judge have to wait until assuming the bench to give orders?
If Percoco’s bribery conviction is overturned, then Aiello’s would likely be, as well. After all, if no bribe actually took place, then no one can be convicted of the bribe in the first place.
The Percoco and Ciminelli cases were argued back-to-back Monday morning. A decision is not expected until next year.
Staff writer Douglass Dowty can be reached at ddowty@syracuse.com or (315) 470-6070.
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