Retired Omaha officer pleads ‘not guilty’ in federal court; others held over until Wednesday
Four men — including Councilman Vinny Palermo — arrested after indictments detailed fraudulent use of LPOA, PACE funds
OMAHA, Neb. (WOWT) - The four men facing federal charges after two indictments were unsealed last week made their initial appearances in a Lincoln court on Monday afternoon and were back in jail that night.
The government alleges they conspired to defraud nonprofits aimed at helping disadvantaged youth.
Following more than an hour of information from prosecutors regarding retired Omaha Police Officer Johnny Palermo on Monday, the judge ordered him held until trial. The hearing was a lot longer than usual because of the government’s PowerPoint presentation.
U.S. District Court Judge Cheryl Zwart then combined the hearings for the remaining three men in order to expedite them.
Councilman Vinny Palermo, 49, who is of no relation to the retired officer; retired Omaha Police Capt. Richard “Richie” Gonzalez, 55; and Council Bluffs fundraiser Jack Olson, 66, also known as “Cody Jones,” will remain in custody until Wednesday, when the defense will get to offer their cross presentation.
All three will remain in custody until at least Wednesday while their attorneys review the case documents — and prepare to bring witnesses to argue why they shouldn’t be held until trial, which is likely months away. That means Vinny Palermo will remain in custody when the City Council meets to consider withdrawing his leadership position on Tuesday.
Randy Paragas, the attorney for Vinny Palermo, said he was learning much of the information about the case against his client from the hearing and hadn’t yet had a chance to discuss it with his client.
“Because of the voluminous amount of evidence that was presented, which I already told you was irregular at a detention hearing, it takes some time to digest that and provide a proper defense to that,” he said. “A lot of that information was just put on us today, and we haven’t even had a chance to even confer with any of our clients.”
While the government revealed tons of evidence Monday against all four defendants, there was one part that only impacted Councilman Palermo: the sentencing form he signed in 2019 stating the terms of his probation.
The government alleges the councilman violated all the terms of his probation, and said they plan to argue why he should stay in jail until trial.
Retired officer pleads ‘not guilty’
Johnny Palermo, 47, pled “not guilty” Monday in federal court in Lincoln. Some of the 15 felony 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.
6 News reached out to the Omaha Police Department regarding that case.
“The related sexual assault investigation was thoroughly conducted by our detectives and presented to the Douglas County Attorney’s Office for prosecution. Unfortunately, it did not move past this point. This is not unusual for sexual assault cases, as they are very sensitive and difficult cases to prosecute for various reasons,” OPD Lt. Neal Bonnacci said.
Prosecutors also alleged Monday that Johnny Palermo may have ties to two gangs and tried to paint him as thumbing his nose at the government even after he knew he was under investigation.
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.
Following more than an hour of initial testimony on Monday, the judge said she couldn’t trust Palermo — from allegedly possessing several burner phones to allegedly interfering with a rape investigation to allegedly trading drugs for sex — and ordered him to remain in custody.
The four men were arrested Friday after two federal indictments were unsealed alleging wire fraud and various financial schemes. All four were being held in a Saunders County jail and were back there Monday night.
One of Friday’s indictments naming Vinny and Johnny Palermo and Richie Gonzalez, lists nine federal counts of varying types of fraud, alleging that the councilman accepted services like airfare, luxury hotel accommodations, and travel arrangements from now-retired OPD officers Richard Gonzalez and Johnny Palermo — no relation to Vinny — all in exchange for him using his influence a city councilman to their advantage.
The other indictment — naming Johnny Palermo, Gonzalez, and Jack Olson — contains 15 counts including wire fraud, conspiracy, and scheming to defraud a bank and the LPOA. There are also allegations that Olson solicited illegal sex at a massage parlor in exchange for free advertising for the business in the LPOA ad book; and that Palermo and Gonzalez conspired to manipulate the police investigation.
Following the arrests last week, attorneys said that their clients are not flight risks, noting that none of them had fled following the FBI raids in December.
Vinny Palermo’s case could be further complicated by the fact that he is currently on probation — through the end of this year — for failing to three years’ worth of tax returns. Prosecutors told 6 News last week that they plan to ask that the councilman remain in jail.
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