News

By Jerry Lynott jlynott@timesleader.com
Business Writer
Jerry Lynott on Facebook   |   @TLJerryLynott on Twitter

WILKES-BARRE – Five people who guaranteed financing for a townhouse project that’s also backed by Luzerne County judges Mark Ciavarella and Michael Conahan and their wives owe $4.1 million after the company behind the development defaulted on the loans.

Read more Luzerne County Judges articles

First National Community Bank of Dunmore obtained judgments Tuesday that were identical to those issued against the judges and their wives last week.

Luzerne County Prothonotary Jill Moran, attorney Robert Powell and his wife, Debra, and Michael Cestone and his wife, Nancy, must pay the bank for the defaults of W-Cat Inc., which received a $2.5 million loan and two $1 million lines of credit for The Sanctuary, an 84-unit development in Wright Township.

Moran also holds the offices of president, secretary and treasurer of W-Cat, which lists the Fox Run Road, Drums, address of The Powell Law Group, where she is a partner. She took over Powell’s interest in W-Cat.

The company made some payments on the loans but fell behind, allowing the bank to obtain the judgments. The company paid a little more than $88,000 on the three-year loan that was extended six months to Nov. 3, 2008. The payments on the lines of credit were considerably larger at $223,896 and $265,963.

Judgments against the Powells and Moran were filed in Luzerne County Court of Common Pleas and against the Cestones in Lackawanna County Court.

Cestone, of Dalton, is a director at the bank and president of S.G. Mastriani Construction Co., a Dunmore general contractor for the development.

Conahan, of Mountain Top, was also a director at the bank until he resigned last month after federal authorities charged him and Ciavarella of Kingston in a $2.6 million kickback scheme involving juvenile detention centers once owned by Powell.

The chairman of the bank, Louis A. DeNaples, stepped down last year after a grand jury indicted him on charges he lied to state gambling officials in Harrisburg when seeking a license for his Mount Airy Resort Casino in Monroe County. His case is pending in Dauphin County.

The judges listed W-Cat on the 2007 statements of financial interest they filed with the state Supreme Court. They pleaded guilty in U.S. Middle District Court, Scranton, last week and are free pending sentencing.

Powell, through his attorneys, has been identified as one of the two unnamed participants in the scheme. But they said Powell was a victim of the judges’ demands for payment for placing children in the PA Child Care detention center in Pittston Township and the Western PA Child Care center in the western part of the state.