Judge decides three suspects in Omaha public corruption trial will remain in custody

OMAHA, Neb. (WOWT) - A federal judge in Nebraska has ordered two retired Omaha police officers and the Latino Peace Officers Association chief fundraiser to remain in custody until trial.

Omaha City Councilman Vinny Palermo has also asked to be released from custody; a ruling on his appeal is expected in the next couple of days. Since the councilman was already on federal probation for failing to file his tax returns, his appeal for detention had an extra layer of arguments.

All four individuals have been in jail since they were indicted in late April in what the government calls a public corruption case. Investigators allege the city councilman, retired Omaha Police Capt. Richie Gonzalez, retired OPD Officer Johnny Palermo, and fundraiser Jack Olson conspired to defraud nonprofits such as LPOA and PACE — organizations aimed at helping disadvantaged youth in the metro.

In April, Federal Magistrate Cheryl Zwart said in court after hearing the case against the first defendant that she didn’t trust Johnny Palermo. Prosecutors argued that he would obstruct the investigation if allowed to be at home before trial. The same judge ordered all four to be detained until the trial — which has yet to be scheduled.

Defense attorneys argued that their clients knew they were being investigated for months — that a grand jury was talking to witnesses — and yet their clients never tried to run. They were asking a different judge to give them another hearing and reconsider detention. Senior Judge John Gerrard denied their appeals.

This raises new questions regarding South Omaha Councilman Vinny Palermo’s political future. Based on the judge’s decision with the other three defendants, it seems likely that he, too, will remain in jail until trial. If that’s the case, the city charter allows his removal from his seat on the City Council after three consecutive months of unexcused absences. Based on the timing, Vinny Palermo could be removed from his political position in late July.

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