(Omaha, NE) -- Omaha City Councilman Vinny Palermo is facing a federal indictment following an investigation into the misuse of funds.
The indictments were unsealed after the Friday morning arrests of Councilman Vinny Palermo, Former Omaha Police Officer Johnny Palermo, Former Omaha Police Captain and Former PACE Executive Director Richard Gonzalez and Jack Olson. In the first indictment, Johnny Palermo, Gonzalez, and Olson are charged with defrauding donors of the Latino Peace Officers’ Association (LPOA) and the LPOA board. Johnny Palermo and Gonzalez are also charged with defrauding LPOA and Police Athletics for Community Engagement (PACE) for their own personal benefit.
Johnny Palermo is separately charged with wire fraud through an alleged false application to obtain a Paycheck Protection Program or PPP loan through his purported real estate company, Palermo Investments, LLC. Johnny Palermo is also charged with making false statements to the Small Business Administration in an attempt to get an Economic Injury and Disaster loan. Palermo is also charged with accepting a stream of financial benefits from Gonzalez and Olson that influenced him to interfere with an ongoing sexual assault investigation for which Olson is the lead suspect.
In the second indictment, Johnny Palermo and Gonzalez are charged with conspiring with Omaha City Councilman Vinny Palermo. Federal Prosecutors say Councilman Palermo was gifted a luxury hotel suite, a trip to Las Vegas, and other destinations, among other items of value in exchange for Vinny Palermo’s official acts done for the benefit of LPOA and PACE. Johnny Palermo was the President of LPOA and Gonzalez was the Executive Director of PACE and a member of LPOA. Federal Prosecutors says Councilman Palermo awarded money to both non-profits and failed to disclose the private benefits that he was receiving while taking official acts for the benefit of LPOA and PACE.
Councilman Palermo is also facing charges for failing to disclose income, gifts, and other items of value that he received from Omaha Glass Pro, a company that he voted to award city contracts to during the charged timeframes, along with failing to disclose discounted concrete work to his backyard pool that was poured by a concrete contractor that also had contracts with the City of Omaha. Vinny Palermo is also alleged to have concealed his status on federal probation when he applied for a PPP loan for approximately $68,000 that was later forgiven, which money went to the benefit of his sole proprietorship, Vinny’s Tree Service, and for his personal benefit.
- Johnny Palermo faces 15 charges in both indictments. The charges include conspiracy to commit wire fraud and conspiracy to commit honest services fraud, honest services fraud and making false statements on loan applications.
- Jack Olson is alleged to have solicited funds for LPOA using the false identity of “Cody Jones.” Olson is charged with aiding and abetting Officer Johnny Palermo’s honest services fraud, conspiracy to defraud LPOA donors and the LPOA and wire fraud.
- Gonzalez faces charges of conspiracy to commit wire fraud and conspiracy to commit honest services fraud, wire fraud, aiding and abetting the honest services fraud of Officer Johnny Palermo and making false statements on loan applications.
- Councilman Palermo is charged with conspiracy to commit honest services fraud, wire fraud and bank fraud.
After the arrests, FBI Omaha Special Agent in Charge Eugene Kowel said, “Public corruption is a top criminal priority for the FBI. Special Agents from the FBI Omaha field office, with the cooperation of our federal, state and local law enforcement partners, worked hundreds of hours on the investigation that led to today’s arrests. We especially appreciate our partnership with the Omaha Police Department in this case. Corruption tears at the foundation of our democracy. No level of corruption should be tolerated or accepted.”
Each of the defendants will make their initial federal court appearance on Monday in Lincoln.
Omaha Police Chief Todd Schmaderer and Omaha Mayor Jean Stothert issued the following statements:
"I am appalled, but unfortunately not shocked at the content of the federal indictments. As the federal investigation continues, there is a possibility that more arrests will be made. The federal indictments speak for themselves. I want to thank the Federal Bureau of Investigation and the United States Attorney’s Office for their diligent and thorough work." - Omaha Police Chief Todd Schmaderer
"A preliminary review of the Grand Jury indictment which was unsealed this morning is tremendously concerning.
Councilman Palermo should immediately resign from the Omaha City Council. He has violated the trust of the citizens he was elected to represent and damaged public confidence in the City Council. A council member under federal indictment for numerous complaints relating to criminal conspiracy, fraud, and public corruption cannot be entrusted with spending taxpayer money, making decisions that impact public safety and the many other responsibilities that come with public office. We are concerned about potential conflicts of interest with votes cast by Councilman Palermo during the six years he has served on the Council. As the federal investigation continues, a review of his voting record may be necessary.
The two former Omaha Police officers indicted today do not represent the professionalism and integrity of the Omaha Police Department. The alleged actions by these former officers, which were performed outside of their duties with the Omaha Police Department, do not represent the high standards of the Omaha Police Department and will not impact our commitment to public safety. Chief Schmaderer has made personnel decisions to protect the department. The Chief is committed to transparency and accountability. He has earned the public’s trust." - Mayor Jean Stothert