Saturday, July 12, 2014

Failed area development in tax sale

The Sanctuary is linked to former attorney, 2 past county judges in corruption scandal

September 22. 2013 11:46PM

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A failed Wright Township townhouse development linked to former attorney Robert Powell and two past judges involved in a public corruption scandal is again on Luzerne County’s back-tax auction listing.

The 37-acre tract along Church Road is owned by W-Cat Inc., a company set up by Powell and former county prothonotary Jill Moran.

Powell was released from a Florida halfway house in April after completing an 18-month prison sentence for failing to report a crime relating to his kickback payments to the two judges, Mark Ciavarella and Michael T. Conahan. Both ex-judges are both in prison.

First National Community Bank of Dunmore has been in litigation seeking payment of millions of dollars in loans for the Wright Township townhouse project, called “The Sanctuary.”

Moran, the judges and their wives, Powell and his wife, and the head of the development’s construction company, Michael Cestone, and his wife had guaranteed the bank’s loans.

The W-Cat property had been up for tax auction two years ago, but First National Community Bank ended up paying $38,775 in taxes owed from 2008 through 2010 to get it out of the sale.

The bank intervened because the property may be needed to recoup some of the millions of dollars in loans owed by Powell and others.

W-Cat now owes $45,732 in school, county and local property taxes for 2011 and 2012.

The property didn’t sell at a first-stage auction last week, when liens and all back taxes would become the responsibility of bidders.

However, the property would likely draw bidders at the final stage, free-and-clear auction next summer, when all liens and taxes are cleared.

The bank would have to pay $45,732 to prevent the property from advancing to the free-and-clear. The 2013 taxes also would be tacked on if payment is made 2014.

The property is assessed at $1.23 million.

A three-judge panel of the state Superior Court recently ordered Powell’s firm, the Powell Law Group, to pay First National Community Bank more than $6 million for attorney fees and defaulted loans that had been paid to W-Cat and Powell’s company, Big Kahuna.

W-Cat initially received a 2005 loan of $2.5 million that was extended with two separate $1 million lines of credit. Big Kahuna had received a $1.35 million loan in 2003 and $225,000 in 2004.

The Superior Court unanimously rejected Powell Law Group’s arguments that the attorney fees were “excessive” and the loan documents lacked proper signatures and initials.

Powell’s firm is still pursuing a separate November 2012 lawsuit against the bank alleging the lender’s actions caused problems with loan and failed townhouse project.

A county judge in June denied the bank’s attempt to throw out the suit.

The Powell Law Group, which is now run by Moran and based in Hazle Township, alleges negligence and conflict of interest by the bank and certain former bank directors, and seeks more than $50,000 in damages.

Public records show Powell has an address in Florida, but he could not be reached for comment.

Big Kahuna owned Powell’s former law office in Butler Township.

First National Community Bank secured ownership of the Butler Township property through a mortgage foreclosure action in August 2012 and sold the property for $675,000 in July to Fox Run Plaza, LLC, county property records show. Christopher B. Slusser and Kenneth J. Temborski are listed as members of Fox Run Plaza on mortgage documents.


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