Just weeks after his wife filed for divorce Omaha City Council Vice-President Vinny Palermo is named in a federal indictment, accused of, among other things taking kickbacks and a scheme that misused funds from PACE, an Omaha non-profit aimed at keeping inner city kids in athletics and out of trouble.

According to a statement released by Omaha Mayor Jean Stothert, Palermo should “immediately resign” from the council. Stothert, a Republican, says a preliminary review of the Grand Jury indictment “is tremendously concerning.”

The case against Palermo and three others follows December FBI searches that included Democrat Palermo’s $530,000 south Omaha home, all part of a federal probe that found Omaha Police Chief Todd Schmaderer noting at that time that he’s, “Concerned that PACE may have been used for criminal activity.”

As NCN first reported, the investigation found the city suspending over $340,000 in funding to PACE while the investigation continued.

According to federal records, Palermo is facing numerous “pending counts” including bank fraud and wire fraud, and is scheduled to appear in federal court Monday afternoon.

Palermo, who was elected in 2017 and reelected in 2021, refused to comment on the raid at his home and has not been available to comment on today’s information.

The other three individuals named in the indictment are retired Omaha Police Capt. Rich Gonzalez, Jack Olson and retired Omaha Police Officer Johnny Palermo.

According to the U.S. Attorney, Councilman Palermo:

  • Deprived “the citizens of Nebraska of Councilman Palermo’s honest services through paid travel benefits, including a luxury hotel suite, a trip to Las Vegas, and other destinations, among other items of value in exchange for Vincent J. Palermo’s official acts done for the benefit of LPOA [Latino Police Officers Association] and PACE.  Johnny Palermo was the President of LPOA and Gonzalez was the Executive Director of PACE and a member of LPOA.  Councilman Palermo awarded money to both non-profits and failed to disclose the private benefits that he was receiving while taking official acts for the benefit of LPOA and PACE. 
  • Vincent J. Palermo is further charged with failing to disclose personal benefits, including income, gifts, and other items of value that he received from Omaha Glass Pro, a company that he voted to award city contracts to during the charged timeframes, along with failing to disclose discounted concrete work to his backyard pool that was poured by a concrete contractor that also had contracts with the City of Omaha.
  • Finally, Vincent J. Palermo is alleged to have concealed his status on federal probation when he applied for a PPP loan for approximately $68,000 that was later forgiven, which money went to the benefit of his sole proprietorship, Vinny’s Tree Service, and for his personal benefit.

In late 2019, Palermo was sentenced to four years federal probation, which is still ongoing, for failing to file federal income tax returns in 2012, ’13, and ’14, payments that amounted to at least $212,076.

As for their pending divorce, the judge has issued a temporary order that, among other things, finds the estranged couple both allowed to live under the same half-a-million-dollar roof on south 13th street.

According to the order, Mrs. Palermo “shall have exclusive use of the ‘upstairs’ and Master Bedroom, while the councilman “shall have exclusive use of the ‘basement’ including the basement bedroom and basement kitchen.” The order goes on to say, “the laundry room of the basement may be used by either party.”

Just days before the indictment Palermo changed his Facebook Profile picture it now says, “Everybody’s a gangster until a gangster walks in the room.” It was accompanied by a photo of Palermo wearing a PACE t-shirt looking out his front window—the photo first appeared in the Omaha World-Herald, taken the day of the FBI raid.

As for Mayor Stothert she is also concerned about, “Potential conflicts of interest with votes cast by Councilman Palermo during the six years he has served on the Council.  As the federal investigation continues, a review of his voting record may be necessary.”

City Council President Pete Festersen, a Democrat released the following statement: “This is a matter of great concern that we will be reviewing closely. I can assure citizens that the City Council will continue to serve them and conduct the city’s business as Councilmember Palermo avails himself of due process in the matter.”