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Fraudster conned SF Hilton in kickback scheme, gets 5 years in prison

This image shows the entrance of a Hilton hotel with a large blue Hilton sign and the address number 750. People are walking and carrying luggage outside. The building is tall and modern.
An ex-manager at the Hilton in San Francisco’s Financial District has been sentenced for a kickback scheme that defrauded the hotel. | | Source: Tâm Vũ/The Standard

A former executive at San Francisco’s Financial District Hilton hotel was sentenced to five years and five months in prison for masterminding a kickback scheme where he worked with contractors to inflate invoices.

Prosecutors said 60-year-old Geoffrey Palermo personally pocketed some $1.9 million from the illicit arrangement, which ran from 2013 to 2016. Three years later, prosecutors said Palermo falsified loan applications and failed to pay taxes when running a body shop he owned.

Palermo pleaded guilty in March to wire fraud, making a false statement to a bank and failing to pay taxes.

In his plea agreement, Palermo admitted to working with two contractors to falsely inflate construction invoices submitted to the Hilton and splitting the profits. All told, the hotel paid $8.4 million based on invoices from the contractors.

The image shows a tall, modern concrete building viewed from below, with a blue sign reading "Hilton" prominently displayed at the bottom.
Prosecutors claim former Hilton Hotel executive Geoffrey Palermo personally pocketed some $1.9 million from an illicit arrangement where he worked with contractors to inflate invoices. | Source: Tâm Vũ/The Standard

The Hilton did not immediately respond to The Standard’s inquiries about the case.

Later, according to the plea agreement, Palermo owned and operated a body shop called GMP Cars where he submitted false financial statements to obtain $5 million in Small Business Administration loans and also failed to pay employee federal income, Social Security and Medicare taxes.

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Palermo later applied for a Paycheck Protection Program loan with bogus documents that claimed he had filed payroll taxes, according to the plea agreement.

In a now-defunct personal blog, Palermo described himself as a “respected presence” who is “committed to charitable endeavors.”

Separate from the federal case, Palermo was busted last year for allegedly trying to sell a Ford Mustang on Craigslist that had been brought to his Novato auto shop for repairs, according to Marin Local News.

Tomoki Chien can be reached at tchien@sfstandard.com