SAN FRANCISCO—On Friday, June 5, Geoffrey Palermo, a former San Francisco Hilton hotel manager and owner of GMP Cars, was charged for wire fraud and making false loan claims.
Palermo is set to appear in a U.S. federal court in San Francisco on Wednesday, June 10 before Magistrate Judge Laurel Beeler. The prosecutor is the Corporate Fraud Strike Force unit of the U.S. Attorney’s Office.
As a manager of a Hilton hotel from 2013 to 2016, Palermo, 56, who is a current resident of Novato, California, allegedly engaged in embezzlement and kickback schemes. Between March 2014 and June 2016, the criminal complaint claims that a contractor for the hotel paid Palermo $1.5 million in kickbacks.
As the owner of GMP Cars, Palermo allegedly used money from the business to pay for his own travel and a Ferrari racing car—expenditures that eventually destabilized the company financially. The complaint also alleges that Palermo lied on a 2019 application for two loans. Palermo allegedly did not report that he overdrew GMP Cars’ bank accounts by over $700,000 and did not accurately disclose how much money he owed to other corporations.
Palermo has also been charged with making false statements in April 2020 in order to receive about $1.7 million from the Paycheck Protection Program (PPP), a relief fund intended to help small businesses suffering financial downturn due to the COVID-19 pandemic. Allegedly, Palermo claimed that GMP Cars was still obligated to pay payroll taxes for its employees, though the company had decided not to since 2019.
Regarding this particular charge, Federal Bureau of Investigation Special Agent in Charge John Bennett said in a public statement issued by the Department of Justice, “The FBI, along with our federal partners, will actively pursue this type of criminal behavior—especially of those seeking to fraudulently profit from the current health crisis.”
The investigation into these charges is ongoing and the claims of the criminal complaint are still only allegations.