Federal indictments in Omaha: Details about the 4 men and their 41 charges

OMAHA, Neb. (WOWT) - The vice president of the Omaha City Council, two retired city police officers, and a man hired to raise funds for a nonprofit supporting Latino peace officers were arrested Friday to face 41 charges relating to misuse of funds for that organization.

Unsealing two indictments, the U.S. Attorney’s Office on Friday also announced the arrests of Omaha City Council Vice President Vinny Palermo, 49; former Omaha Police Officer Johnny Palermo, 47; former OPD Captain and past PACE Executive Director Richard “Richie” Gonzalez, 55; and Jack Olson, 66, of Council Bluffs, Iowa, who was also known as “Cody Jones.”

All four had all been arrested that morning after the federal grand jury returned indictments this week alleging wire fraud and various financial schemes. They were all being held in a Saunders County jail.

Attorneys for Gonzalez and both Palermos told 6 News that they expect their clients will be released after their initial court appearances in Lincoln on Monday. The attorneys said that their clients are not flight risks, noting that none of them had fled following the FBI raids in December.

RELATED COVERAGE

4 arrested on federal charges

Councilman Vinny Palermo, two former Omaha Police officers, and a local fundraiser were arrested Friday after two federal indictments were unsealed alleging wire fraud and various financial schemes.

City officials, organizations react to charges

Reactions from Omaha city officials ranged from “not shocked” to concern over the fallout of federal indictments resulting in the arrest of four people, including the vice president of the Omaha City Council.

FBI serves warrants at home of Omaha councilman, police officer

FBI Omaha agents served federal search warrants at the homes of an Omaha city councilman, two city police officers, and PACE offices in December.

Johnny Palermo

Johnny Palermo was an Omaha Police officer and the LPOA president when the FBI served federal search warrants in December. He later retired as an OPD officer after he was put on leave because of this investigation.

Some of the charges he faces have to do with allegations that he impeded a sexual assault investigation involving Jack Olson, also named in one of the indictments unsealed on Friday.

Across both indictments, Johnny Palermo is facing 15 felony charges:

• conspiracy to commit wire fraud and conspiracy to commit honest services fraud are each punishable by up to 20 years’ imprisonment, a $250,000 fine, and three years of supervised release for each violation
• wire fraud, punishable by up to 20 years’ imprisonment, a $250,000 fine, and three years of supervised release for each violation
• honest services fraud, punishable by up to 20 years’ imprisonment, a $250,000 fine, and three years of supervised release for each violation
• making false statements on loan applications, punishable by up to 30 years’ imprisonment, a $1 million fine, and five years of supervised release for each violation

Richard ‘Richie’ Gonzalez

Richard Gonzalez is a retired Omaha police captain named in both federal indictments unsealed on Friday. He also previously served as executive director of PACE and is a member of LPOA Omaha.

Some of the allegations against him in the indictment include using LPOA Omaha funds for plane tickets for himself, his friends, and family; or buying thousands of dollars in drinks for himself and others at local establishments.

He is also the brother of Greg Gonzalez, who lost a heated race for Douglas County Sheriff to Aaron Hanson in November.

Across both indictments, Richard Gonzalez faces 13 felony charges:

• conspiracy to commit wire fraud and conspiracy to commit honest services fraud, both punishable by up to 20 years’ imprisonment, a $250,000 fine, and three years of supervised release for each violation
• wire fraud, punishable by up to 20 years’ imprisonment, a $250,000 fine, and three years of supervised release for each violation
• aiding and abetting the honest services fraud of Officer Johnny Palermo, punishable by up to 20 years’ imprisonment, a $250,000 fine, and three years of supervised release for each violation
• making false statements on loan applications, punishable by up to 30 years’ imprisonment, a $1,000,000 fine, and five years of supervised release for each violation

Vincent ‘Vinny’ Palermo

Omaha City Council Vice President Vinny Palermo represents the city’s 4th District, including areas south of Interstate 80 and east of 96th Street. He was elected to the council in 2017 and re-elected in 2021, defeating Becky Barrientos-Patlan to retain his seat despite being halfway into his probation period for not filing his tax returns.

Palermo is also a member of the Turn Back Tax committee, which awards funds to nonprofits — including LPOA Omaha.

The indictment alleges that the councilman was provided personal and financial benefits in exchange for him taking actions as a councilman that would benefit LPOA, PACE, and the four men indicted Friday.

He also didn’t disclose his conflict of interest regarding a business he owned while the city was awarding contracts to that business, according to the document. He also applied for PPP loan money for a different business he owned — even though he wasn’t eligible for the funds because he was on federal probation.

Palermo is now facing nine felony charges:

• conspiracy to commit honest services fraud, punishable by up to 20 years’ imprisonment, a $250,000 fine, and three years of supervised release for each violation
• honest services fraud, punishable by up to 20 years’ imprisonment, a $250,000 fine, and three years of supervised release for each violation
• wire fraud, punishable by up to 20 years’ imprisonment, a $250,000 fine, and three years of supervised release for each violation
• bank fraud, punishable by up to 30 years’ imprisonment, a $1 million fine, and five years for each violation

While the city’s charter doesn’t automatically remove him from the council for being indicted, Omaha Mayor Jean Stothert has called on him to resign.

Jack Olson aka ‘Cody Jones’

According to one of two federal indictments unsealed on Friday, Jack Olson raised funds for LPAO Omaha under the name “Cody Jones” but pocketed the bulk of the funds.

During the course of the investigation, it was revealed that the fraudulent funds were Olson’s only source of income.

Olson is facing four felony charges:

• aiding and abetting honest services fraud of then-Officer Johnny Palermo, punishable by up to 20 years’ imprisonment, a $250,000 fine, and three years of supervised release for each violation
• conspiracy to defraud LPOA donors and the LPOA, punishable by up to 20 years’ imprisonment, a $250,000 fine, and three years of supervised release for each in violation
• wire fraud, punishable by up to 20 years’ imprisonment, a $250,000 fine, and three years of supervised release for each violation

READ THE INDICTMENTS

Indictment details

1ST INDICTMENT

The indictment naming Vinny Palermo, Johnny Palermo, and Richie Gonzalez includes nine counts: one for honest services fraud conspiracy, two for honest services fraud, one for bank fraud, and four for wire fraud.

According to the document, the three are connected in the investigation by way of the LPOA.

COUNT I – HONEST SERVICES FRAUD CONSPIRACY

Starting at the beginning of 2018 — not long after Councilman Vinny Palermo began his first term representing the city’s 4th District — the three men conspired to commit “honest services fraud,” devising a scheme to defraud the residents of Omaha of their rights to the honest services of a city councilman.

According to the indictment, the councilman was provided personal and financial benefits — including airfare, luxury hotel rooms, and travel to Las Vegas, San Diego, Houston, Denver, and Minneapolis under the guise of attending LPOA conferences; as well as other benefits — in exchange for him taking actions as a councilman that would benefit LPOA, PACE, and themselves.

Fifteen of the receipts turned in to LPOA, totaling $2,931, were reported to the organization as paying for Gonzalez and Officer Palermo dining with and entertaining the councilman.

The benefits weren’t disclosed — as required under state law — by the councilman, nor were they approved by the LPOA board.

COUNT II – HONEST SERVICES FRAUD

Councilman Palermo claimed to be the owner of Omaha Glass Pro between 2012 and 2019. During that time, he received $93,000 in contracts awarded by the city but didn’t disclose his conflict of interest until after he transferred ownership in 2019.

He then concealed the fact that Omaha Glass Pro, its current owner, and the former manager paid off the loan on his truck paid rent for the councilman’s tree service business, and made tax payments.

COUNT III – BANK FRAUD

From Nov. 1, 2018, to April 5, 2023, the indictment states that Councilman Palermo tried to defraud First National Bank of Omaha out of more than $68,000.

He applied for PPP loan money for Vinny’s Tree Service which he wasn’t allowed to get because he was on federal probation.

COUNT IV – HONEST SERVICES FRAUD

The councilman allegedly received discounted concrete work from a contractor who was awarded City of Omaha contracts — and did Palermo’s own pool deck in his backyard, but he didn’t disclose the financial benefits.

COUNT V-VII – WIRE FRAUD

The councilman didn’t disclose material income, rent, and other property and gifts that he received from Omaha Glass Pro, LPOA, and PACE in April 2019, April 2020, February 2021, and March 2022.

2ND INDICTMENT

The other indictment, which names Johnny Palermo, Gonzalez, and Jack Olson, includes two counts of wire fraud conspiracy, one count of honest services fraud, six counts of wire fraud, one count involving a false statement made to the small business administration, two counts involving a scheme to defraud a financial institution, and two counts involving a scheme to defraud the LPOA.

COUNTS I-II – WIRE FRAUD CONSPIRACY

The indictment alleges that then-PACE Executive Director Richard Gonzales falsely listed himself as a board member and chaplain of LPOA board member on the organization’s tax documents. In handling charity funds for the organization, he would regularly issue payments to himself, Palermo, and Jack Olson.

The indictment also alleges that Palermo and Gonzalez would also take friends and family on all-inclusive trips to Las Vegas.

Additionally, the documents allege that Olson solicited donations as “Cody Jones,” raising money for LPOA while telling donors that 100% of their donations were going to the organization. Instead, he would send the money back to an account he had in his actual name, and then spend the money on himself and his co-defendants. Gonzalez would also vouch for “Cody Jones” whenever donors, LPOA members, and “others” would question the activities of that individual.

Among the donations, as listed in the indictment:

• $67,000 from Walmart between March 2019 and June 2022
• $50,000 JBS between April 2019 and August 2022
• $11,500 from the Catholic Archbishop of Omaha
• $6,500 from Nebraska-based Cargill Beef between August 2019 and January 2022
• $5,500 from Ameriprise Financial Services between March 2019 and June 2020
• $1,000 from Scheels between July 2019 and February 2022
• $750 from Midnite Dreams in Waverly given on May 16, 2019

The indictment also states that Olson spent $46,000 of funds donated to LPOA at the Lemon Drop bar on alcohol for himself and his co-defendants so that he and Gonzalez could gamble on Keno there.

“He (Olson) broke. He hangs with Rich and all they is spend money, between you and me, at the bar on Keno — you know what I mean?” Johnny Palermo says to a grand jury witness in a Sept. 9 phone conversation included in the indictment.

In another conversation with Gonzalez, he tells him he’s invited a couple more people to join them.

“We’ll get their drinks cuz LPOA is paying for it, you know what I’m saying,” Palermo says to Gonzalez.

Olson would also collect restaurant gift cards and other items of value from donors but not report them.

During the course of these events, according to the documents, Gonzalez and former OPD Officer Johnny Palermo, who actually was an LPOA board member, signed an LPOA contract with Olson — without the board’s knowledge or consent — increasing the fundraiser’s take of the gross donations from 65% to 80%. His cut, the documents allege, amounted to more than $500,000 between January 2018 and December 2022.

Gonzalez would also call the Omaha Police Credit Union to pre-authorize Olson to cash checks made out to LPOA without filing any documentation that Olson had those funds or was even authorized to possess LPOA funds. Gonzalez would also loan Olson thousands of dollars with the knowledge that Olson would pay him back using donations solicited for LPOA.

In raising money, they would also tell potential funders that Olson had several employees and significant overhead costs, even operating a call center, when he actually primarily worked alone and out of his own home — until Gonzales “secured” him a rental space from a retired LPOA board member.

“Yeah, well yeah. That — he takes a large cut of it. But the money goes to good causes — that stuff that we do in the community. But his overhead is his overhead, you know? And I don’t — you know, I think he has paid drivers,” Palermo said In a mid-December call with the spokesperson of a donor identified as a victim in the indictment.

The spokesperson told Palermo they had grown concerned after the organization had been contacted by the FBI — and had questions about “Cody Jack” and the donations they’d made to the LPOA.

“One of the things we really look at in organizations is, No. 1: Our money goes to what we put it to,” the spokesperson said. “And I’ve been told that (Olson’s) takin more than half of it as a cut and... and only a very small portion goes ... to your guys’ organization.”

Additionally, the indictment says, Gonzalez would secure free ad space in the LPOA advertising book for a massage parlor in exchange for free — and illegal — sex services from the business for Olson.

“It was all that and a bag of chips,” Olson said in an Oct. 7 phone call to Gonzalez after saying he’d stopped at the massage parlor. He told Gonzalez he had secured 100 free 60-minute massages.

About 10 days later, the tone of the conversations had shifted, with Gonzalez telling an unnamed witness that Palermo needed to start “vetting these people that we hang out with.” The witness in turn advises Gonzalez to put his “other phone in the (expletive) washer or microwave,” according to the indictment.

In the second count, the indictment alleges that Palermo and Gonzalez conspired to submit fraudulent invoices to PACE from Palermo’s “purported” real-estate company, Palermo Investments LLC, otherwise known as “PMOINVESLLC,” for property work like debris removal, bleacher repairs, and other basic custodial work.

But the work would be done — at the direction of Gonzalez — by a salaried PACE staffer who was already doing similar work for the organization, and give the employee a cut of the funds.

Three payments are listed in the indictments:

• $5,520 paid on May 14, 2021
• $964 paid on July 16, 2021
• $1,660 paid on Oct. 15, 2021

COUNT III – HONEST SERVICES FRAUD

In this count, the indictment alleges that between January 2018 and December 2022, the three men conspired to shut down a sexual assault investigation in which Jack Olson was the lead suspect.

The indictment alleges that then-Officer Palermo impeded and obstructed the OPD investigation, and that Gonzalez emailed an OPD detective information he claimed to have come from a licensed attorney but that he and Palermo had actually formulated themselves.

Included in the indictment are excerpts from a few phone calls among the three men to hash out the details of how to make the incident appear to be a “catfish” situation in which the woman involved is just looking for “free medical”; and a call Gonzalez makes to an unnamed witness to walk through the details of the situation, asking them to “look at something for Jack.”

COUNTS IV-X – WIRE FRAUD

In one count, the indictment describes how Gonzalez used the name of another PACE employee who wasn’t aware of the transactions to buy airline tickets for $282 apiece in February 2021 for his daughter and one of her friends under the guise of a trip for PACE scholarship students.

In another count, Gonzalez and Palermo used an LPOA credit card to purchase flights and accommodations for themselves, a local bar owner, a coach for one of Gonzelez’s kid’s teams as well as family members and “a public official” for a trip to Las Vegas.

The March and April 2012 charges amounted to nearly $3,600:

• $388 to secure the hotel rooms
• $3,012 for the eight airline tickets to Las Vegas
• $189 credit charge to a Las Vegas hotel

COUNT XI

Centers around a false statement made to the Small Business Administration on July 28, 2020, in order to secure an Economic Disaster Injury Loan. In the request for funds, Palermo said his company earned $60,000 in gross revenue for tax year 2020 and suffered $5,000 in “lost rents.”

According to the indictment, however, “the defendant well knew that he did not actually have income-generating real estate properties with paying tenants.”

His company also didn’t earn $60,000 that year, the indictment states.

COUNTS XII-XIII

This count alleges that Palermo applied for a PPP loan for Palermo Investments on May 5, 2021, submitting false documents. On June 4, 2021, he used part of those funds to buy plane tickets to Hawaii for himself, friends, and family, according to the indictment.

COUNTS XIV-XV

In this count, by ways also outlined in the first count, the indictment states that Olson solicited a $2,000 payment from Walmart intended as a donation to LPOA, but pocketed $1,600 of that for himself. This count also mentions a phone conversation with a spokesperson for the “donor victim.”

RELATED COVERAGE

Palermo, retired police officers among 4 arrested on federal charges

Two indictments detail the fraudulent use of funds intended for LPOA, PACE.

Mayor calls on Councilman Palermo to resign

Reactions from Omaha city officials ranged from “not shocked” to concern over the fallout of federal indictments resulting in the arrest of four people, including the vice president of the Omaha City Council.

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