Buffalo contractor wins state courthouse victory as executives fight federal charges

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lp ciminelli website
The LPCiminelli website

Buffalo contractor LPCiminelli has won a $3.2 million judgement (plus interest) against the local public school district even as the company feels severe pain from federal bid rigging charges — which Engineering News-Record (ENR) reports has caused the business to shut down its New York general contracting business.

The two cases are unrelated.

State Supreme Court Judge Deborah A. Chimes dismissed on Feb. 15 two breach-of-contract claims on Feb. 15 related to a lawsuit about the company’s profits on a $1.3 billion schools renovation and construction project. Two other claims in the lawsuit were dismissed by another state judge last year, but the school district is appealing that ruling.

The Buffalo News reports that the school district sued the contractor two years ago “after Carl P. Paladino – then a member of the school board – raised allegations of profiteering by the company. His allegations prompted an analysis conducted in 2015 by The Buffalo News, which found that approximately $400 million of spending on the project was unaccounted for in public records.

However, in a five-page ruling, Chimes said she found no evidence that LPCiminelli improperly hid information from the district or failed to properly rehabilitate 48 city schools.

“It is … uncontested that the District’s architects certified that (LPCiminelli) properly completed the work,” Chimes wrote. “Moreover, the District has accepted the work in question” and “is occupying the renovated buildings and utilizing the schools.”

Lawyer Benjamin M. Zuffranieri with Hodgson Russ, representing LPCiminelli, was quoted as saying that the court decision should put to rest any allegations that the contractor made excessive profits, breached its contract or illegally withheld any information it was required to provide to the school district.

“This was the largest and most successful construction project in the city of Buffalo and Erie County in the past 50 years,” Zuffranieri told The News. “When it was over, there should have been a celebration, not a lawsuit. This is the second state judge who has dismissed the meritless claims in this lawsuit.”

Meanwhile, the story involving the federal charges (a trial won’t start until late spring) against former LPCiminelli executives is ongoing, and ENR says the consequences have radically altered the company.

They were indicted along with others, more than 18 months ago on bribery, corruption and fraud charges in a New York state contract “pay for play.”

“Ranking at No. 120 on ENR’s 2016 Top 400 Contractors list with $614 million in 2015 revenue—its latest appearance—the firm auctioned its equipment fleet, tools and other assets in mid-December and ceased general contracting operations soon after.”

ENR reported:

Under new president Kyle Tuttle, LPCiminelli now has focused on program management and development. In an emailed statement, he said, the firm “has made the business decision to close our general contracting company.” Tuttle did not answer further questions and other company spokespersons did not return requests for comment.

ENR reports that the former LPCiminelli executives, Louis Ciminelli, chairman and CEO; Michael Laipple, president; and Kevin Schuler, senior vice-president “were charged with paying Alain Kaloyeros, then president of the State University of New York’s Polytechnic Institute in Albany, and former state lobbyist Todd Howe, to secretly rig the bidding process to favor the company as construction manager for a $750-million Tesla solar panel manufacturing plant near Buffalo, the signature project in the state’s Buffalo Billion economic development plan.”

The defendants have pled not guilty.

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