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Former Luzerne County Attorney Pleads Guilty to Tax Evasion
SCRANTON, PA – Robert J. Powell, 65, of Palm Beach, Florida, appeared in federal district court and pled guilty to a one-count criminal information charging him with tax evasion for calendar year 2016.
Powell was released on an unsecured bond while awaiting his sentencing. According to court documents and statements made in court, Powell sought to evade a substantial tax that was due and owing the IRS for 2016 by using nominee bank accounts, causing an accountant to file a request for a filing extension that falsely reported zero estimated tax liability for 2016, and making false statements during an IRS audit in 2019.
Powell’s license to practice law was suspended in 2009 and he was subsequently disbarred in 2015. As a result, in 2009 he relinquished his ownership of The Powell Law Group. He nevertheless retained the right to collect 90% of the remainder of any future fees collected by the firm after the payment of firm expenses.
Specifically, The Powell Law Group represented thousands of plaintiffs in a mass tort litigation that settled for approximately $5.15 billion in 2015 and The Powell Law Group was expected to receive approximately $120 million in attorneys’ fees from that settlement. Prior to the attorneys’ fees disbursement, The Powell Law Group and its co-counsel used those future legal fees as collateral to obtain a series of loans totaling over $125 million.
Instead of depositing the loan proceeds into the Powell Law Group’s bank accounts and using them to pay firm expenses, Powell instead directed the loans to nominee bank accounts that were under his control. He then used the loan proceeds for his personal debts and expenses, as well as his and his former law partner’s personal benefit.
In June 2016, most of the attorneys’ fees were finally disbursed and the loans were repaid. Nevertheless, Powell did not file a personal income tax return and pay taxes on the receipt of the fees in that year. After the initial disbursement and through October 2019, an additional $12 million in attorneys’ fees was distributed and The Powell Law Group’s share continued to be directed into nominee bank accounts that Powell controlled.
Powell personally received an additional $3.6 million of the fees during that time. Indeed for the full period of tax years 2010 through 2022, Powell did not file income tax returns for those years despite receiving and spending other personal income. Rather he willfully attempted to evade taxes due and owing by him to the United States.
In 2019, when the IRS commenced an audit of his tax liabilities, Powell made false statements to the interviewing revenue agents to conceal his income and expenditures for tax years 2014 through 2016. Namely, Powell falsely stated that his only source of funds were loan advances, that he and his spouse did not have signature authority or control over other bank accounts, and that he had no ownership in any corporations.
Ultimately, as alleged by the government, over the relevant time period Powell received millions in income resulting in substantial taxes that were due but not paid to the United States.
In the plea agreement filed with the Court, Powell agreed to pay full restitution to the IRS in an amount to be determined by the Court at a later date.
Key Facts
- State: Pennsylvania
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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