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Three years after he finished serving an 18-month prison sentence for his role in the “Kids for Cash” scandal, former attorney Robert Powell is once again the subject of a federal investigation, according to claims made by former Luzerne County judge Michael Conahan in a Florida lawsuit.

In a recent affidavit, filed in response to a lawsuit Powell Law brought against Conahan and his wife, Barbara, Conahan claimed Powell, former Luzerne County prothonotary Jill Moran and Powell Law itself are the subject of investigations by a number of federal agencies, including the Securities and Exchange Commission (SEC).

Conahan, who prepared the filing from a federal prison in Florida, did not elaborate on the specifics of the alleged investigation, which has been rumored for months.

SEC public affairs specialist Ryan T. White in Washington, D.C., declined comment on the matter Friday.

Tampa, Florida attorney Keith D. Skorewicz, who is representing Powell Law in the Florida suit, said a message seeking comment was relayed to Powell Friday.

In response, Skorewicz said the action in Florida focuses solely on recouping a debt Powell Law paid that was guaranteed by the Conahans. “I can’t help what Mr. Conahan chooses to say in his affidavit,” Skorewicz said Friday. “That’s up to him.”

Moran and Powell could not be reached for comment directly Friday.

The once-close relationship between Conahan and former law partners Moran and Powell shattered during a county corruption probe that led to prison time for both Conahan and Powell.

Court records show Powell has lived in a Palm Beach Gardens mansion since serving a prison sentence for failing to report the $2.8 million “Kids for Cash” kickback scheme, which involved Conahan, former Luzerne County judge Mark Ciavarella and two juvenile detention centers Powell had co-owned.

The two former judges are still serving federal prison sentences — 28 years for Ciavarella and 17.5 years for Conahan. Conahan is incarcerated at the Federal Correctional Center in Coleman, Florida.

Moran, who still resides in the county and works at an area home loan business, was not charged in the corruption probe but resigned as county prothonotary in March 2009 as part of an agreement with federal prosecutors.

Florida suit

Powell Law sued the Conahans in Florida last June in an attempt to recoup defaulted loan payments the firm made on “The Sanctuary,” a failed 37-acre Wright Township development owned by W-Cat Inc., a company set up by Powell and Moran.

The Conahans, who have denied authorizing notarized loan guarantees and described their signatures as forgeries, filed their own lawsuit in March in Luzerne County against Moran, Powell, Powell Law and W-Cat.

According to a May 19 affidavit in the Florida lawsuit prepared by Michael Conahan, who is representing himself, the Conahans’ Luzerne County litigation will include allegations of fraud and civil conspiracy committed by the defendants.

“It is my understanding there have been similar issues of impropriety involving forged, notarized documents prepared by Powell Law Group P.C. by former principal Robert J. Powell when he was actively practicing as a lawyer in cases in Pittsburgh and Scranton, Pennsylvania,” Conahan wrote.

Conahan said he had informed his attorney in the past that he had no knowledge of the loan guarantee and did not sign it before a notary as indicated, but he did not challenge the matter because the loan was satisfied.

He also accused Powell — who was disbarred by consent due to the charges against him — of initiating the Florida litigation, even though Powell and Moran have filed documents saying she has been the firm’s sole managing director and president since on or before Aug. 31, 2009 .

Conahan said Moran stated during a public social event that she did not file or authorize the Florida suit, and he alleged Skorewicz’ firm was hired by Powell, not Moran.

Moran filed her own affidavit May 13 in Florida on behalf of Powell Law, reiterating her claim that she is the firm’s sole shareholder and representative.

The Conahans entered into loan guarantees in 2005 that now require them to reimburse Powell Law $4.6 million, Moran said. Powell Law had entered into a confidential settlement with First National Community Bank to pay off the delinquent debt in May 2014 amid a “total absence of any defense or objection” by the Conahans regarding the guarantee, she wrote.

After hearing arguments from both sides at a hearing in which Michael Conahan appeared by telephone, a Florida judge issued an order June 1 denying Powell Law’s motion for summary judgement.

Ohio litigation

Powell Law also is challenging attempts in an Ohio court by two Philadelphia attorneys to claim a portion of legal fees from an environmental case.

Court filings estimate $125.7 million in payments have been earmarked for Powell Law from environmental litigation involving the former Kerr-McGee Corp. railroad tie manufacturing facility in Avoca.

Montgomery, McCracken, Walker & Rhoades LLP says it is owed $2.9 million for its work on the Avoca litigation after Powell got in trouble as part of the corruption probe. Attorney Richard A. Sprague, of Sprague and Sprague, says Powell and his wife also owe Sprague $169,432 for his past legal representation.

The court proceedings are taking place in Cincinnati because it is home to Garretson Resolution Group Inc., the firm appointed to oversee a trust paying out claims to the Avoca plaintiffs.

According to a transcript of a May 17 hearing in the Ohio case, Powell and Moran have an agreement that he will receive 90 percent of the Avoca legal fees paid to Powell Law, while she is entitled to the remaining 10 percent.

However, Powell Law’s cut of the $125.7 million is unclear due to confidential agreements related to advance loan and co-counsel arrangements hammered out by the firm.

Cincinnati attorney Robert P. Johnson said judicial intervention is warranted because his client, the Montgomery firm, would be forced to “play Russian roulette” obtaining payment from Powell Law.

“The problem is that the court has an awful lot of grounds based on the record from which not to trust Powell Law Group and Mr. Powell not to steal everything that isn’t nailed down and to not get a crowbar after that which is,” Johnson said.

Pittsburgh attorney Stephen S. Stallings, representing Powell Law, disagreed with that characterization.

“I take issue with this — or fundamental context of this — which is that they have to chase these funds or they’ll never see them again,” he said. “At every turn Mr. Powell and The Powell Law Group have shown up. At every turn, when they’ve had an obligation, they’ve made it.”

Stallings said the Avoca legal fee payments are being directed from the Ohio trust to another trust and that fears of a “nefarious scheme to misappropriate money” are unfounded.

“He calls it a trust. I call it a shell,” Johnson said at the hearing, describing the structure as an attempt by Powell Law to avoid paying the Montgomery firm.

Powell’s net worth is of interest in a local lawsuit filed by juveniles and their parents and guardians alleging harm over the juvenile detention kickback scheme.

Under a settlement agreement, Powell and Powell Law paid the plaintiffs in that lawsuit $4.7 million, and may be required to pay up to $2.5 million more based on his net worth calculated by the end of this year. Powell’s company Vision Holdings LLC also is part of that settlement.

Conahan
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Powell
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Disgraced judge makes claim in court filing

By Jennifer Learn-Andes

[email protected]

Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.