Omaha City Councilman Vinny Palermo took gifts of airfare, luxury hotel accommodations, travel arrangements and other items in exchange for political favors, new federal court documents allege. Palermo also allegedly did not disclose a financial conflict of interest when he steered $93,000 worth of city contracts toward his companies, obtained a Payment Protection Program loan and forgiveness worth $68,750 under false pretenses, and got a substantial discount on concrete work from a city contractor.
Palermo faces several felony fraud charges along with retired Omaha Police Capt. Rich Gonzalez, retired officer Johnny Palermo (no relation to the councilman) and Jack Olson. The latter three, named in a separate indictment, allegedly defrauded the Latino Peace Officers Association (LPOA), an organization for Latino police in Omaha, and Police Athletics for Community Engagement (PACE), a youth sports organization run by law enforcement.
The four defendants were arrested Friday and will appear in federal court in Lincoln at 1 p.m. Monday.
Palermo is currently on probation for a previous conviction of tax evasion. Mayor Jean Stothert and three current city council members have requested a resolution to remove Palermo from the council. However, City Charter does not give the body power to remove members. Palermo will only lose his seat if he is convicted or misses three calendar months of meetings.
“At the very least he should not hold the position of Vice President,” Councilmember Brinker Harding said in a statement from him and councilmembers Aimee Melton and Don Rowe. “The pattern of his past action and these new allegations of criminal conspiracy and public corruption is concerning.”
According to the indictments, filed April 19, Palermo took gifts from the LPOA ranging from flights to San Diego, Houston, Denver and Minneapolis to nearly $3,000 spent on “dining and entertainment.” Palermo did not disclose these gifts to the Nebraska Accountability and Disclosure Commission or that he had a conflict of interest with the LPOA, the indictment alleges.
As the defendants became aware the FBI was looking into these allegations, they scrambled to piece together what they could be charged with, wiretapped conversations allegedly show.
“It made me look into the Jewish people, and how they operate,” Johnny Palermo allegedly told Vinny Palermo. “They’re like the mafia on top of the mafia … that’s what we gotta be like, you know what I’m saying.”
“They always have been…that’s why district 66 is so tight,” Palermo responded, referencing the Westside Community Schools district in Omaha. “They take care of each other.”
In total, Palermo also allegedly helped the LPOA get $60,600 through his association with the South Omaha Turn Back Tax Committee, a group designed to redistribute extra state funds to impoverished communities.
Palermo, who is vice president of the Omaha City Council, also allegedly spent years voting to give his own company city contracts with disclosing his conflict of interest which he used to pay for commercial rent and a 2018 Chevrolet truck.
“They’re putting all their pieces of the puzzle together,” Palermo told Gonzalez in a wiretapped phone call on Oct. 14, 2022.
Gonzalez, former officer Palermo and Olson are facing charges related to defrauding LPOA and PACE. According to Johnny Palermo’s indictment, Olson would solicit donations for the LPOA under the name “Cody Jones” saying “every penny” would go toward athletic programs for underprivileged children to keep them away froms street gangs.
Named donors in the indictment include Wal-Mart ($67,000), S&C Wholesale ($50,000), Scheels ($1,000), Cargill Beef ($6,500) and the Catholic Archbishop of Omaha ($11,500).
In reality, the indictment alleges, between 65% and 80% of the money went back to Jack Olson — more than a half million dollars between Jan. 1, 2018 and Dec. 31, 2022. Former officers Palermo and Gonzalez would also personally loan Olson thousands of dollars from the LPOA charity fund, the indictment alleges.
The indictment alleges Olson spent that money on himself and the defendants. One of the expenses appears to be $46,000 on alcohol and gambling at the Lemon Drop Lounge on South 36th and T streets as well as a trip to Las Vegas, Nevada.
The indictment also alleges Olson suggested to Gonzalez that the LPOA advertise a massage parlor where Olson received commercial sex services.
Not much is mentioned about Olson’s background or how he came to be connected with the other defendants. The indictment alleges Olson operated out of a residence in Council Bluffs. Gonzalez allegedly brought him on as a LPOA fundraiser after Olson was fired from a previous fundraising job “due to an arrest involving drugs,
prostitution, and allegations of embezzling donations” — a fact Gonzalez did not disclose to the LPOA board.
According to the indictment, former officer Palermo and Gonzalez also defrauded PACE, submitting false invoices to be paid to Palermo’s real estate company while a salaried PACE employee completed the task.
Transcriptions of the defendants wiretapped conversations range from paranoid to anti-semetic to brazen. At one point, Gonzalez, Olson and former officer Palermo discuss an alleged sexual assault between Olson and a woman he met at the Lemon Drop Lounge.
“So I fuckin’ bit her but I didn’t bite that hard, so that’s the only DNA they’ll get because I didn’t c** in the fuckin’ bitch,” Olson allegedly told Gonzalez and former officer Palermo.
“Bro I’m telling you, all you have to say is [it was] consensual,” Palermo later told Olson. “I worked that unit, you can’t prove it, you can’t prove like sexual assault, you know what I mean?”
Olsen rounds off the conversation by informing the others that he got $500 worth of gift cards to Brazilian steakhouse Texas de Brazil, which the indictment alleges are also part of the fraud conspiracy. Gonzalez also asked an unnamed witness to “look at something” involving the incident.
The three also
The indictments follow a December FBI and Nebraska State Patrol search of Councilman Palermo, Johnny Palermo and Gonzalez’s homes.
“I am appalled, but unfortunately not shocked at the content of the federal indictments,” Omaha Police Chief Todd Schmaderer said in a statement. “As the federal investigation continues, there is a possibility that more arrests will be made. The federal indictments speak for themselves.”
In a statement, Mayor Jean Stothert called on Councilman Palermo to resign immediately. Stothert also said she would be withholding city funding for PACE until further notice.
City Council President Pete Festersen said, in a statement, that the city council would carry on its duties as Palermo “avails himself of due process in the matter.”
In a statement, PACE Chairman Lance Jones as well as founder and acting executive director Tony Espejo said the allegations should reflect more on Gonzalez, its former executive director, rather than the organization. They say they did not take any money from Jack Olson and that the total defrauded from PACE amounts to $9,500. They said they are still planning on holding summer activities, including 72 soccer teams and 18 baseball teams.
This is a developing story.