UPDATE: June 8, 2018: Prosecutors have dropped all charges against former LPCiminelli president Michael Laipple. U.S. Attorney for the Southern District of New York Geoffrey Berman filed the motion on June 1 citing that a review of additional evidence indicated that prosecuting Laipple "would not be in the interests of justice." This leaves Louis Ciminelli as the last remaining defendant from LPCiminelli.

According to additional court documents, U.S. Attorney Geoffrey Berman also requested that the trial against the remaining defendants, scheduled to begin June 11, be postponed to June 18 in order make up for the time it took prosecutors to review about 24,000 documents provided recently by LPCiminelli. Jude Valerie Caproni granted that request.

Dive Brief:

• Kevin Schuler, a former executive with Buffalo, New York-based general contractor LPCiminelli, has pleaded guilty to fraud and conspiracy for his part in an alleged bid-rigging scheme that netted his former employer a $750 million contract related to the Buffalo Billion development program, according to Reuters.
• Prosecutors claim that Schuler, two other LPCiminelli executives — Louis Ciminelli and Michael Laipple — and other individuals related to New York Gov. Andrew Cuomo's signature economic initiative rigged the bid process in favor of LPCiminelli and other contractors through bribes paid to former Cuomo aide Todd Howe and one other individual. Former U.S. Attorney Preet Bharara alleged that LPCiminelli received the multimillion-dollar SolarCity construction contract in return for bribes, camouflaged as consultant fees to Howe, who had the ability to influence contract awards, according to prosecutors' claims.
• Schuler could testify against other defendants in the case, including his former coworkers Ciminelli and Laipple, who are scheduled to go on trial next month. Schuler did not plead guilty to bribery, charges that have been dropped against Ciminelli and Laipple, according to the Buffalo News.

Dive Insight:  

Because of the fallout from the criminal charges, which have reportedly cost LPCiminelli $4 billion in contracts from other customers, the company has stopped functioning as a general contractor and instead has turned its focus to program management and development. LPCiminelli has also auctioned off tolls and equipment and laid off at least 10% of its employees. Two former employees, members of the Ciminelli family, have started their own businesses.

LPCiminelli was in court earlier this year as well, The Buffalo News reported. In February, a state Supreme Court judge dismissed two breach-of-contract claims from a lawsuit over the company's profits on renovation and construction jobs on Buffalo Schools worth $1.3 billion. The school district was directed to pay LPCiminelli the nearly $3.2 million and interest that it owes.

Construction corruption south of Buffalo, in New York City, has been in the spotlight the last few years but not because it's more likely to happen there. Manhattan authorities formed the construction fraud task force in 2016 and have made it their business to root out fraud, serious safety violations and other illegal industry acts, such as wage theft. Still, though, according to a report from The Real Deal, lack of oversight in the city's $45 billion-a-year- construction industry paves the way for those intent on committing fraud.

For example, in February, the New York State Police and the Manhattan District Attorney's Office said they were investigating $100 million in potential "pay to play" activity in the city's $9 billion interiors sector. Former executives at Turner Construction and Bloomberg LP were implicated in the inquiry, which focused on overall corruption as well as work at Bloomberg's new headquarters. Authorities allege that some Turner and Bloomberg executives took bribes and kickbacks from subcontractors in return for construction contracts. In response, Turner said the former employees were acting outside of the controls put in place to avoid such an incident.