May 26, 2022

‘Kids-for-Cash’ figure agrees to $4.75M settlement

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gavel, scale, and law book

gavel, scale, and law book

By Max Mitchell, From The Legal Intelligencer

Robert J. Powell, the former co-owner of two private juvenile-detention facilities at the center of the Luzerne County “kids-for-cash” scandal, has agreed to pay at least $4.75 million to settle his portion of a civil suit brought by a class of juvenile plaintiffs.

The master stipulation and agreement of settlement the parties jointly filed also said that, depending on Powell’s assets at the end of 2016, Powell could provide up to an additional $2.75 million toward the settlement.

An order preliminarily approving the agreement was issued in the U.S. District Court for the Middle District of Pennsylvania in Wallace v. Powell on Monday. The order, issued by U.S. District Judge A. Richard Caputo, said class members must file a proof of claim by Oct. 5 to partake in the settlement.

A final approval hearing has been set for Dec. 16. Under the settlement, the defendants, which along with Powell include Vision Holdings LLC and Powell Law Group, deny any liability.

The settlement comes more than three years after Robert K. Mericle, the builder of the two detention centers—PA Child Care and Western PA Child Care—agreed to pay $17.75 million to settle claims in the same case.

Court documents said Powell’s portion of the settlement will go toward those who were not fully reimbursed under the Mericle settlement and a subsequent settlement with the child care facilities and Mid-Atlantic Youth Services Corp., the company that operated the facilities.

Documents noted the class likely consists of at least 2,400 people.

The consolidated suits in Wallace allege that former Luzerne County Judges Michael T. Conahan and Mark A. Ciavarella conspired with the other defendants and used their influence as judicial officers to select PA Child Care and Western PA Child Care as detention facilities, and that they intentionally filled those facilities with juveniles to earn the conspirators excessive profits.

Litigation against Conahan and Ciavarella in the Wallace action is ongoing.

In 2010, Conahan pleaded guilty to one count of racketeering and was sentenced to 17-and-a-half years of incarceration.

A federal jury in Scranton in February 2011 found Ciavarella guilty of 12 of the 39 counts of corruption filed against him, including racketeering, racketeering conspiracy, honest services mail fraud, money laundering conspiracy and a host of tax fraud charges. He received a 28-year sentence.

In a June 2009 plea agreement, Powell pleaded guilty to failing to report a felony to federal authorities and with being an accessory after the fact to a tax conspiracy, but alleged his involvement in the scheme escalated as the judges forced his hand. He received an 18-month sentence.

The plaintiffs are juveniles or the parents of juveniles who appeared before Ciavarella between 2003 and 2008, and were either placed in the facilities by Ciavarella or adjudicated delinquent. The first of the consolidated suits was filed in February 2009.

A trial had been set for January, but, instead of going to trial, a master stipulation and agreement was filed with the court in March, court papers said.

“We’re gratified that we were able to bring this piece of the case to an amicable resolution,” said plaintiffs’ attorney David S. Senoff of Caroselli, Beachler, McTiernan & Coleman. “We’re hopeful the court is going to grant final approval to this settlement with the Powell defendants, and hopefully, once that happens, the kids who are the victims will finally be able to put this behind them.”

Sol H. Weiss of Anapol Schwartz, who also represented the plaintiffs, did not return a call for comment. Pittsburgh attorney Stephen S. Stallings, who represented Powell and Powell Law Group, and Stephen M. Sinaiko of Kramer Levin Naftalis & Frankel, who represented Powell and Vision Holdings, also did not return a call for comment.

Daniel Segal of Hangley Aronchick Segal Pudlin & Schiller, who also represented the plaintiffs, declined to comment.

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