A 56-year-old Novato man is scheduled to appear in federal court in San Francisco this week on a criminal complaint charging him with wire fraud and making false loan application statements in what prosecutors say are multiple schemes to defraud from 2013 to 2020 totaling about $8 million.
Geoffrey Palermo allegedly embezzled large sums of money, including through capital improvement kickback schemes from 2013 to 2016 as a Hilton Hotel manager in San Francisco, according to the complaint.
United States Attorney David Anderson said in a news release:
“One contractor frequently hired by Palermo for projects at the hotel is suspected of paying Palermo approximately $1.5 million in kickbacks between March 2013 and June 2016.”
Palermo, who left Hilton in 2016, owned and operated GMP Cars, a collision and auto repair chain, leaving the company in financial distress through “lavish expenditures, including a Ferrari racing car and personal travel,” according to the complaint.
Palermo in 2019 applied for two loans totaling some $5 million from a Small Business Administration preferred lender, using “several material omissions and false statements” in his application, the complaint said.
The complaint also alleges that this past April Palermo again made false and misleading statements in applying for $1.7 million from the SBA’s Paycheck Protection Program, created to provide relief to small businesses during the novel coronavirus health emergency. Palermo claimed in his application that GMP Cars paid payroll taxes for salaried employees when internal records showed it had halted payment of payroll taxes in mid-2019.
The complaint states:
“[Laid-off GMP Cars employees] have had difficulty in recent months collecting their full unemployment benefits due to GMP Cars’ failure to pay payroll taxes and accurately report employee wages to California’s Employment Development Department.”
While the investigation by the U.S. Attorney’s Office, the Small Business Administration and the Federal Bureau of Investigation is ongoing, prosecutors say evidence shows Palermo has fraudulently obtained at least $8 million.
Anderson said in a statement:
“What is particularly galling about the conduct alleged in the complaint is that while Geoffrey Palermo was wrongfully receiving PPP funds, he was not paying required payroll taxes for his employees, making it difficult or impossible for his employees to obtain the benefits to which they were rightfully entitled.”
Anderson added:
“PPP funds are intended to protect the many, not to enrich the few. The fraud alleged in the indictment reversed Congressional intent by depriving employees and enriching Palermo.”
Palermo is scheduled to make his initial appearance in federal court before U.S. Magistrate Judge Laurel Beeler Wednesday.
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Former Hilton manager, car shop owner charged with years of fraud schemes - SFBay
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