‘Al Capone of South Omaha’ Is in Jail—and Still on City Council

Until he was indicted last week on nine fraud and corruption charges, Vinny Palermo was vice president of the Omaha City Council, the man who took charge whenever the mayor and the council president were out of town.

His fellow council members have now stripped him of that title.

And federal investigators say he has assumed a new one.

“The Al Capone of South Omaha,” Palermo allegedly called himself in a recorded jailhouse phone call.

Investigators also noted that Palermo once quoted the late mob boss John Gotti on Facebook.

“Everybody’s a gangster until a gangster walks in the room.”

The 49-year-old’s thuggish side was cited in federal court this week as the government sought to have him and his three co-defendants locked up pending trial.

Prosecutors alleged that on top of everything else, Palermo had also repeatedly violated the terms of four years of probation he is serving from a 2019 conviction for failing to file tax returns.

On Friday, federal Magistrate Judge Cheryl Zwart ordered Palermo remanded. Her reasoning could have applied to the real Al Capone.

“The court finds Defendant’s release poses a serious risk of obstruction or attempted obstruction of justice, and of actual or attempted intimidation of witnesses,” the order said.

The judge noted something else Palermo was recorded saying when he realized why they were being investigated by the FBI. “[T]hey’re investigating for kickbacks. Which means someone’s a… rat,” he allegedly said in pure gangsterese.

As the Al Capone of South Omaha sits behind bars awaiting trial, he will remain the council member from struggling District 4, which will be without a vote on city issues. His fellow representatives were able to swiftly and unanimously remove him from his leadership role, but are not empowered by the city charter to remove him from his seat. He can keep it until he is convicted or misses council meetings for 90 calendar days.

Unless he is recalled.

Steps toward that remedy are already being taken by 27-year-old Jonathan Renteria, a community activist and son of a former meat plant worker. He previously advocated for other meat plant workers during the height of COVID. He also joined an effort to expand Medicaid in Nebraska and got a grassroots education that extended beyond health care.

Two factors spurred him to action when he learned of Palermo’s indictment last week.

“The severity of the charges and the deterioration of the quality of life in South Omaha in recent years,” he told The Daily Beast.

He filled out a recall form he found on the Election Commission website. One section asked him to state his reason in up to 60 words or less. He figured that Palermo would read it at some point and so he wrote a kind of message to Vinny. He began with “Neglect of duty” and listed problems and issues ranging from undistributed relief funds to COVID deaths to potholes to the demolition of the public library. These were all matters that an honest and aggressive hero of South Omaha should have been addressing. He closed with an Italian adage.

Se non vuoi scivolare, stai lontano da luoghi scivolosi. (If you don’t want to slip, stay away from slippery places.)

He had the paper notarized and took it down to the Election Commission office, where he was advised that what he wrote in the “why” section would be on the actual petition for people to sign. He decided to be more succinct.

‘We, the voters of District 4, demand the immediate recall of Councilman Vinny Palermo for failing to uphold the trust of his constituents by violating his probation, abusing his power for personal gain, and being charged with nine felony counts.”

Palermo will now have 20 days to file a defense. Renteria will then have 30 days to collect 2,462 signatures, which is 35 percent of the votes cast for the position in 2021. He has already teamed up with fellow activist Sarah Smolen and they have begun recruiting people to collect signatures. He has kept interviews to a minimum and cautiously avoids grandstanding.

“It’s not ‘Look at me!’” he told The Daily Beast on Friday. “It’s ‘There’s a process.’”

At that moment, Palermo’s attorney, W. Randall Paragas, was en route to see his client at a correctional facility and discuss the judge’s order. Paragas said that Palermo is seeking possible legal recourse and is sticking by his not guilty plea.

The three co-defendants have also pleaded not guilty. Richard Gonzalez and Johnny Palermo (no relation to Vinny) are two former Omaha cops affiliated with the Latino Peace Officers Associations (LPOA) and Police Athletics for Community Engagement (PACE). Jack Olson is a civilian with a long history of raising funds for police organizations and charities. The indictment says he pocketed up to 80 percent of the money he raised for LPOA and PACE and used the name Cody Jones because he has a history of drug arrests. He also gave himself a title in a recorded conversation.

“I’m the devil’s fucking cousin,” he was taped telling Gonzalez on an FBI wiretap last fall.

Court papers allege that Olson used LPOA and PACE funds meant for cops and kids to patronize a massage parlor and play Keno at the Lemon Drop bar.

The indictment also says Vinny Palermo arranged public funding for LPOA and PACE. Gonzalez was the head of LPOA. He and Johnny Palermo allegedly rewarded the councilman with such things as a junket to Las Vegas.

“Executive Director RICHARD GONZALEZ and Police Officer JOHNNY PALERMO provided personal and financial benefits, to include airfare, luxury hotel accommodations, travel arrangements, and other items of value, through a stream of benefits, to City Councilman VINCENT J. PALERMO, in exchange for official actions and with the intent to influence official actions taken by City Councilman VINCENT J. PALERMO, for the benefit of LPOA, PACE, and themselves,” the indictment charges.

Court papers further allege that Vinny Palermo engaged in various corrupt schemes of his own. He is said to have repeatedly voted in favor of city contracts for a company called Omaha Glass Pro without disclosing that he is the owner. Records show the company received $93,000 in payments from the city. And there was allegedly a small scam within the larger one.

“VINCENT J. PALERMO received a truck from Omaha Glass Pro, that is a red 2018 Chevrolet truck,” the indictment alleges. “Omaha Glass Pro paid off the loan on his truck with the same checking account that received the city contract funds awarded to Omaha Glass Pro.”

The indictment further notes that Omaha Glass shares an office with Vinny’s Tree Service, also owned by the councilman. His failure to declare income from the tree service led to his tax conviction four years ago. He is now charged with using Vinny’s Tree Service to commit bank fraud with a $68,750 COVID-era Payroll Protection Program loan for which he was disqualified because he is on probation.

In another instance of alleged corruption, Palermo had a concrete contractor who regularly gets city work pour 2,800 square feet for a deck around his backyard pool.

“That was falsely invoiced and recorded in bookkeeping records as only 1,600 square feet of concrete, resulting in a substantial discount to the defendant from market price,” the indictment says.

Whatever defense Palermo may have against the recall has to be submitted next month. Renteria and his comrades will then set out with the petitions.

“We’ll be ready,” he said.

Read more at The Daily Beast.

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