The Tribune Democrat, Johnstown, PA

Local News

May 29, 2008

Former local man indicted in Iowa bilking

A former Adams Township man convicted of swindling $1 million from investors in Cambria County in the 1980s has been indicted by a federal grand jury in Iowa of bilking investors there.

Nicholas Palazzo, 51, was indicted last week by a grand jury in the federal court in southern Iowa.

Palazzo was known as Michael Tessari until he received his new name through the federal witness protection program and moved to the Des Moines, Iowa, area.

Palazzo’s past – including his former name, his connection to Pennsylvania and a North Carolina swindle – was uncovered by reporters from The Des Moines Register through the Web site Gang Land News.

The newspaper also reported that public records in Iowa, Pennsylvania and North Carolina show Palazzo and Tessari share the same birth date and that both are married to a woman named Deborah born on the same date in 1950.

A spokesman for the U.S. Attorney’s Office for the Southern District of Iowa would neither confirm nor deny any connection of the Tessari surname to Palazzo.

The Iowa indictment contends Palazzo devised a fraudulent investment scheme that promised abnormally high returns on investments. The investments were not made and instead were used by Palazzo for personal purposes, the indictment said.

The pyramid scheme was perpetrated from August 2007 to Jan. 23 by paying initial investors limited funds with money obtained from subsequent investors, the indictment said.

The indictment also charges that Palazzo, a convicted felon not permitted to possess a firearm, was in possession of two shotguns on Dec. 7.

According to the Des Moines newspaper, police said several hundred thousand dollars were involved in the scam.

Tessari was convicted in 1986 in Cambria County of bilking area residents out of nearly $1 million through a similar scheme. He was sentenced to three to 10 years in jail.

He moved to North Carolina in 1994 with the permission of probation officials.

Text Only | Photo Reprints
Local News
Poll

What is the biggest key to reducing gun violence in Johnstown?

Tackling the area's drug problem.
Controlling folks moving into city housing.
Monitoring folks in treatment centers and halfway houses.
Tougher sentencing by the court system.
More police on the streets.

     View Results
House Ads