A grand jury indicted Phyllis Palazzola after a woman said her phone captured details of an alleged murder plan.
SALEM, Mass. — A secret cellphone recording and an allegedly chemical-soaked rag are expected to become key evidence after a grand jury charged a Gloucester woman with trying to murder her lifelong friend during a dispute over an unpaid loan.
Phyllis Palazzola faces five criminal charges stemming from a Jan. 3, 2024, encounter with Marianna DiMercurio in Gloucester. The counts include attempted murder, two forms of assault and battery with a dangerous weapon and two counts of witness intimidation. Palazzola is due in Essex Superior Court on July 21 for arraignment. The allegations are also detailed in a separate civil lawsuit filed by DiMercurio.
The attempted murder indictment alleges that Palazzola tried to kill DiMercurio on Jan. 3, 2024. DiMercurio’s civil complaint supplies a longer account of what she says happened that day. According to the lawsuit, Palazzola offered to drive DiMercurio to a bank to repay money she had borrowed. Rather than stopping at the bank, Palazzola allegedly drove to her Washington Street home in Gloucester. The filing says she entered the house, returned with a rag soaked in WD-40 and pressed it over DiMercurio’s face. DiMercurio alleges the rag caused burning eyes and blurred vision as she struggled to escape. The grand jury identified the rag as a dangerous weapon in one assault count. Another count alleges that the assault caused serious bodily injury. The indictments do not establish guilt, and Palazzola has not entered a publicly reported plea in the new case.
DiMercurio says she escaped from the vehicle, fell and later entered Palazzola’s home to wash her eyes. The civil complaint alleges that Palazzola pursued her as she tried to get away. After DiMercurio reached her own vehicle, she activated her cellphone recorder because she feared another attack, according to the filing. The resulting conversation lasted about 14 minutes. The lawsuit alleges Palazzola acknowledged trying to sedate DiMercurio and described a plan to drive off a bridge with both women inside the vehicle. “I figured that I’d drive off and we would look like an accident that we both died,” Palazzola allegedly said. The complaint also attributes the statement “I was gonna kill us both” to her. The recording itself has not been publicly released, leaving its complete context and audio quality unknown.
Attorney Joseph Orlando, who represents DiMercurio in the civil case, said the recording could become important evidence. Prosecutors may seek to use authenticated portions of it as they build the criminal case, though no court has yet ruled on whether the audio may be admitted at trial. Before recorded speech can be presented to a jury, attorneys may litigate how the recording was obtained, whether it is complete and whether the voices can be reliably identified. Massachusetts generally restricts secret audio recording, but courts examine the facts of each case and possible exceptions when deciding admissibility. No reported ruling has been issued on the DiMercurio recording. The criminal indictment confirms the charges but does not publicly describe all evidence presented to the grand jury or identify every witness who testified.
The witness intimidation counts add another part to the prosecution beyond the alleged physical attack. Publicly reported court records do not provide a complete description of the conduct behind each intimidation charge. DiMercurio’s lawsuit says relatives from both families attended a meeting Jan. 7, 2024, four days after the encounter. During that meeting, Palazzola allegedly admitted again that she had tried to kill DiMercurio. The filing does not list every person present or provide a full transcript of the discussion. It also does not explain whether the intimidation counts arise from that meeting, another contact or separate conduct reviewed by the grand jury. Prosecutors are expected to provide more detail through charging documents, court arguments and evidence exchanges as the case advances.
The alleged attack followed a long-running financial dispute between the women. DiMercurio says she loaned Palazzola $160,000 between October 2021 and February 2022. The civil complaint says they agreed to another $20,000 in interest. DiMercurio alleges the money was meant to help Palazzola pay legal fees connected to an insurance fraud case. After repeated repayment requests, Palazzola offered the January 2024 trip to the bank, the lawsuit says. That alleged promise is important to DiMercurio’s account because it explains why she entered the vehicle and believed the debt would finally be settled. The criminal indictment does not decide whether the entire debt existed or whether every term alleged in the civil complaint was valid. Those financial questions remain part of the separate lawsuit.
Palazzola previously faced an Essex County prosecution related to her former insurance business. Massachusetts officials announced charges in 2023 against Palazzola and Palazzola Insurance Agency, including larceny by embezzlement, forgery and unlicensed insurance activity. The state alleged that customers paid insurance premiums that were not properly forwarded to carriers and that business continued after Palazzola lost her producer license. The civil complaint ties DiMercurio’s loan to legal costs from that case. The prior allegations do not prove the new attempted murder charge, and jurors in any future trial would receive instructions about which evidence they may consider. Prosecutors would have to establish each element of the new offenses beyond a reasonable doubt.
At the July 21 arraignment, the court is expected to formally present the charges and ask Palazzola to enter pleas. A judge may also address release conditions, contact restrictions and future court dates. Prosecutors and defense attorneys would then move into discovery, the process in which evidence is exchanged. That material could include the cellphone recording, medical records, photographs, witness interviews and documents related to the alleged debt. Defense lawyers may file motions seeking to exclude evidence or dismiss particular counts. Prosecutors may respond with additional factual details about the alleged attack. No trial date has been announced, and the case could take months or longer to reach a resolution.
DiMercurio alleges she suffered chemical burns, scratches, disturbed sleep and continuing fear of leaving home. Orlando described the harm as both physical and emotional. The complaint does not include a public medical report confirming the full extent or duration of each injury, though the serious bodily injury indictment indicates that grand jurors heard evidence supporting that accusation. NBC Boston attempted to contact Palazzola at her Gloucester home and contacted an attorney representing her but did not receive a response. Her defense position therefore remains unknown. She is presumed innocent unless prosecutors prove the charges in court.
The next public milestone is Palazzola’s arraignment July 21 in Salem. Until then, the recording, the alleged chemical exposure and the conduct behind the intimidation counts remain central unresolved parts of the prosecution.
Author note: Last updated July 10, 2026.