A Hazleton, Pa., lawyer who grew rich paying cash bribes to judges who sent youngsters to his juvenile facility agreed yesterday to plead guilty to two felonies and to relinquish his interest in a yacht and a corporate jet.
The lawyer, Robert J. Powell, 49, will continue cooperating with federal prosecutors in the sprawling Luzerne County corruption probe that has resulted in a slew of criminal charges, including guilty pleas from two top former county judges.
Powell's cooperation could earn him leniency at his sentencing on tax and wire-fraud charges. He faces a maximum of 51/2 years in prison and a $500,000 fine.
The former judges, Mark A. Ciavarella and Michael J. Conahan, pleaded guilty in February to failing to disclose and pay taxes on more than $2.6 million in payments from Powell and a developer of the two centers, PA Child Care L.L.C. and Western PA Child Care L.L.C. They have agreed to serve seven years and three months in federal prison.
In his plea agreement, Powell admitted that he created phony records to help the ex-judges hide income. He also admitted paying "tens of thousands of dollars in cash" to Conahan.
"Bob Powell is pleading guilty to the offenses listed in the plea agreement because he's guilty," said his attorney, Mark B. Sheppard of Montgomery, McCracken, Walker, & Rhoads in Philadelphia.
Powell contends the judges strong-armed him into making the payments. Sheppard said Powell had no knowledge of any impropriety by Ciavarella in sentencing juveniles to the centers.
"It was never an agreement for kids for cash," Sheppard said.
Instead, federal prosecutors said, the judges worked to eliminate competition for the centers and to secure for them county contracts worth tens of millions of dollars.
Powell was a well-known attorney successful both as a trial lawyer and operator of his juvenile centers, which he co-owned with Gregory R. Zappala, a Pittsburgh-area investment banker. Zappala, who bought Powell's share, has not been accused of any wrongdoing.
The centers charged high fees to the county, and Powell used the profits to fund a plush lifestyle. He also arranged for the centers to make interest-free loans worth millions of dollars to a web of companies he controlled, according to a state audit.
One company owned his $2.6 million private jet - replete with gold-plated fixtures. Another controlled the $1.2 million 56-foot yacht named Reel Justice.
Powell will relinquish both luxuries as part of the plea agreement.
Among the expenses charged against the centers' accounts were a limousine ride to an NCAA tournament, a $3,500 custom suit for the former mayor of Hazleton, who worked for the centers, and $140,000 in prepaid flight time on the plane.
By 2007, Powell had so depleted the accounts that the company began receiving shutoff notices from utility companies, the state audit says.
In the meantime, the Pennsylvania Supreme Court has authorized a judge to dismiss hundreds and possibly thousands of criminal cases against juveniles because Ciavarella failed to inform them of their right to an attorney or disclose his interest in the centers.
Conahan, a county president judge, did not directly hear juvenile cases.
Powell, along with the judges, still faces four separate class-action suits filed by hundreds of juveniles who allege that the scheme interfered with their ability to receive a fair and impartial hearing.
Attorneys with the Juvenile Law Center in Philadelphia, which filed one of the class-action suits, declined to comment.
The judges have argued that they are immune from civil liability for actions they took while serving as judge, and are expected to file motions asking that the suits be dismissed.