Louisiana Record

Tuesday, October 15, 2019

Calcasieu Parish district attorney sees Palermo case as completed

By Nicholas Gueguen | Sep 9, 2017

LAKE CHARLES — As Calcasieu Parish District Attorney John DeRosier views it, the strife among Joseph Palermo Jr., DeRosier's office and the state of Louisiana is over.

"Palermo was originally charged, had been investigated for, I want to say, illegal gaming," DeRosier told the Louisiana Record. "The gaming itself that he was involved in is not illegal. It was video poker. But his involvement in it was not legal. And he was prohibited from being involved in it."

DeRosier said that in the 1990s, Palermo pledged in writing to the Louisiana State Police he would not take part in gaming. Unlicensed gambling is a felony, DeRosier said.

DeRosier said Louisiana and federal investigators looked into Palermo's managment of video poker.

DeRosier said that while Palermo's gambling activities were being investigated, Louisiana State Police approached him to investigate Palermo for keeping stolen heavy equipment that included "a big trailer, an excavator, (and) a couple of bulldozers," according to DeRosier. DeRosier said federal investigators asked him to take the case.

"They wanted to prosecute him in the federal system," DeRosier said. "And at the meantime, the (attorney general's) office had come to me wanting to prosecute him in the state system for the video-poker law violations."

DeRosier said he did not let the federal system take on Palermo's case related to the heavy equipment because he knew they weren't interested in the video-gambling case.

"You've already investigated (the video gambling activities)," DeRosier said of the federal system. "You turned it down because under the federal law – it's a state violation, not a federal law violation. And he needs to be prosecuted on both of them."

DeRosier said Calcasieu Parish District Court had both cases. He said two people from Palermo's family, including Palermo's son, Joseph Palermo III, asked him not to send the heavy equipment case to the federal system or to the attorney general because they felt both parties disliked Palermo and would give him a long jail sentence.

DeRosier told Palermo III he'd keep the case, rely on the evidence unveiled and give Palermo jail time if pertinent. DeRosier said Palermo III accepted that.

DeRosier said his office indicted Palermo in the equipment case.

Some of Palermo's lawyers asked to get him into the 14th Judicial District's pretrial diversion program because they told DeRosier that Palermo would live just a year and a half longer, DeRosier said. DeRosier estimated that request came in October 2013 and said Palermo is living but ailing.

DeRosier didn't let Palermo into the pretrial diversion program.

DeRosier said his office was going to pit money laundering and racketeering charges against Palermo in the illegal gaming case. DeRosier said the two sides came to a plea agreement for the civil and criminal cases and estimated the agreement took place around Feb. 20, 2015.

DeRosier said Palermo was ordered to pay $1.2 million, which American Press reported in May that he had to pay to Louisiana because DeRosier's office charged him according to the Racketeer Influenced and Corrupt Organizations Act (RICO) Statute.

DeRosier said racketeering punishment has a criminal and civil penalty, and the civil penalty can go up to three times the amount of money made illegally. He said his office argued that Palermo brought in $10 million or $15 million illegally.

DeRosier said that Palermo admitted "exposure under the RICO Statute," meaning he knew he could see jail time and pay out a large sum.

"We resolved all of that by him paying $1.2 million, $400,000 of which he paid up front," DeRosier said. "The next two $400,000 payments were due one year and two years later."

DeRosier said that Palermo did not pay his second $400,000 on time and did not notify DeRosier's office. DeRosier said he foreclosed on some of Palermo's real estate as a result.

DeRosier estimated that payment came in May 2016, just five days prior to the sheriff's sale on the property, and said it included interest and attorneys' fees on top of the principal. DeRosier said he divided the second payment among his office, the state police and the attorney general's office. 

DeRosier said Attorney General Jeff Landry held the check for five or six weeks, and a group of the lawyers representing Palermo sued Landry in Baton Rouge. DeRosier said when Palermo sued Landry, he was seeking for the court to rule that Landry could not cash the check and that Landry could not reroute the check to DeRosier, who then canceled it.

"I was already concerned about the actions of the attorney general because he had already fired the investigator that made the case against Palermo," DeRosier said. "So I was leary of the attorney general's participation in all of this to begin with."

Palermo then brought suit against DeRosier's office in January, DeRosier said.

"And a month or so later ... we ended up with a settlement," DeRosier said. "By that time, two payments had already been made. He only owed one $400,000 payment."

DeRosier said Palermo got a Baton Rouge judge to prevent DeRosier's office from attempting to get Palermo's final payment.

"I made them an offer," DeRosier said. "I said, 'Look, this last $400,000 payment, we're supposed to split it three ways. You get the attorney general of Louisiana to waive his one-third, which was about $133,000 or $134,000, pay us two-thirds of this money, and we finish with this.'"

DeRosier said Landry gave up his share of the money.

DeRosier said Palermo had been serving probation for two years for a misdemeanor, which DeRosier said was finished in February because he pleaded guilty to keeping stolen materials.

"So the criminal side of it was over," DeRosier said. "The forfeiture side ended when he paid us two-thirds of the $400,000 that he owed." 

American Press reported in May that DeRosier told them that Palermo's last payment was $300,000.

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Calcasieu Parish District Attorney's Office