A federal judge has ruled that Omaha City Councilman Vinny Palermo is staying in jail.

Palermo, named in a federal indictment accused of fraud and taking kickbacks—selling his public office for his own personal gain—will remain behind bars as he awaits trial, which is likely to be several months from now

Palermo, two former Omaha police officers and a fundraiser are charged with various schemes to get their hands on thousands of dollars from two Omaha non-profits, the Latino Peace Officers Association and PACE, an organization designed to keep inner city kids in sports and out of trouble.

Steve Lefler, the attorney for former Police Captain Rich Gonzalez tells NCN, “We lost, all four are staying in jail.”

According to the judge's ruling if allowed out "based on the grand jury findings" Palermo poses a "serious risk of obstruction or attempted obstruction of justice, and of actual or attempted intimidation of witnesses."

In her ruling Judge Cheryl Zwart notes FBI wiretaps where Palermo "believed his financial web was unraveling. He contacted subpoenaed grand jury witnesses and instructed them on how to testify, explaining that only three responses were acceptable: 'Yes,' 'No,' and 'I don't know.'"

The judge also notes that when Palermo realized he was the subject of a federal investigation he commented, "They're investigating for kickbacks. Which means someone's a...rat."

In addition Zwart's order refers to one of several out of state trips Palermo is accused of taking, allegedly violating his 2019 federal probation following a tax related conviction. According to the judge, Palermo "was part of a group (which included at least one co-defendant) that beat up a lone victim. The victim was punched and thrown against a refrigerator. (Palermo's) knuckles were bloodied by the fighting."

During arguments in Lincoln Federal Court this week, attorneys for the four insisted that if given pre-trial release their clients would stay on the straight and narrow, first and foremost not trying to intimidate witnesses.

The 2-term Democratic Councilman’s lawyer, Randy Paragas, insisted that Palermo would not cross any legal-lines, “Because the bulk of the evidence that was put out for detention had to do with the other three clients…(Vinny Palermo’s) alleged crimes are paper crimes and have to do with filing applications, not filing on disclosures, wrong filings they don’t have anything to do with rapes, and they don’t have anything to do with police cover-ups of drunk driving, and that’s why I think he’s not a risk to obstruct justice.”

But prosecutors made the case that Palermo had already broken the rules, telling grand jury witnesses, including his adult son Vinny Palermo Jr., “what to say.”

In her order the judge described Palermo as having "no physical or mental health issues, and he is not addicted to drugs or alcohol. He was arrested for domestic assault, but that charge was dismissed."

Palermo’s continuing incarceration is likely to make it difficult, if not impossible, for him to hold on to his council seat. According to city rules, after three straight months of unexcused absences from the council's weekly meetings he would forfeit the seat.

So far, despite the urging of Mayor Jean Stothert, Palermo has refused to resign.