Former Councilman Vinny Palermo pleads guilty to wire fraud charge in Omaha corruption case

OMAHA, Neb. (WOWT) - Former Omaha Councilman Vinny Palermo pleaded guilty Friday to one of the nine federal charges filed against him earlier this year in a corruption case involving funds from two local nonprofits.

Palermo pled guilty to a charge of conspiracy to commit wire fraud, punishable by up to 20 years in prison, a $250,000 fine, and three years of supervised release.

In exchange for the plea, the rest of his charges would be dismissed:

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

During Friday’s court appearance, the judge said Palermo would also be made to pay restitution to the city since he used his position as a councilmember to get turnback tax grants and firework permits for the police athletic department nonprofit in exchange for airfare, luxury hotels, and travel arrangements. That figure is yet to be determined.

“The government will have an opportunity to put on what it thinks that the proper restitution should be. In terms of loss to in this case, the public and mr palermo would be responsible for his portion of that whatever the government could prove,” said Randy Paragas, Palermo’s attorney.

If the plea deal is accepted, Palermo will serve a total of 21 months in prison beyond the time he’s already served. He would also become a convicted felon, meaning he wouldn’t be eligible to serve on a jury, and he couldn’t vote or run for office.

The judge is passing along a recommendation that the plea deal be accepted, but the sentencing judge will make that decision at the sentencing hearing on Nov. 16.

For the time being, Palermo will remain in custody, but his attorney did file a motion to have him released until his sentencing hearing. A hearing on the release motion will take place next week.

Palermo, who was recently removed from the Omaha City Council after three months of unexcused absences, has been held in a Wahoo jail.

Palermo and three other defendants pleaded not guilty to federal charges earlier this year; Palermo was already on federal probation after he pled guilty to failing to file three years of tax returns in 2019 ahead of his re-election to the City Council in 2021.

Investigators have alleged that Palermo along with 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. All four pleaded not guilty shortly after they were arrested in April.

All four individuals have been in jail since they were indicted in late April.

Paragas said that right now, there’s nothing to indicate that Palermo will provide testimony against others charged in the case.

“There’s nothing on the table now that Mr. Palermo will be testifying against any of the defendants in this matter,” Paragas said Friday.

The news of Vinny Palermo’s plea change came days after Gonzalez filed paperwork in federal court to request a hearing in order to change his plea. That hearing is scheduled for Tuesday, Aug. 29.

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Reporters John Chapman and Brian Mastre, and Digital Director Gina Dvorak contributed to this report.

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