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Outsmarting fraud in the hospitality industry

With more people traveling and spending money on leisure following the COVID-19 pandemic, fraudsters are once again turning their attention to the hospitality industry. Here we look at the variety of fraud taking place in this sector and how best to prevent it.



When Geoffrey Palermo worked at a Hilton in downtown San Francisco between 2008 and 2016, he devised a scheme to bilk the famous hotel chain of millions of dollars in potential revenues. As manager, Palermo had the authority to sign off on capital improvements projects with contractors, and he colluded with Adan Roldan, a construction company owner, to inflate invoices for renovation work at the hotel. From 2013 to 2016, Palermo approved more than $8 million in payments to Roldan’s company and another contractor, receiving in turn some $1.9 million in kickbacks, according to the U.S. Attorney’s Office in Northern California.

But Palermo’s schemes didn’t stop there. After leaving the Hilton in 2016, he set up a collision and auto repair business and devised a scheme to obtain about $5 million in Small Business Administration (SBA) loans from a commercial lender by making false statements and omissions in loan applications, according to the U.S. Department of Justice. On April 3, 2020, Palermo was also involved in making false statements in his company’s application for a Paycheck Protection Program loan.


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