A former Luzerne County attorney has been sentenced to four years in federal prison for evading millions of dollars in taxes tied to lucrative legal fees, federal authorities stated.
Robert J. Powell, 65, of Palm Beach, Florida, was sentenced to 48 months in prison and three years of supervised release after being convicted of tax evasion. Powell was also ordered to pay $3.5 million in reparations to the Internal Revenue Service, with potential extra taxes, penalties, and interest to be decided.
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According to court records, Powell attempted to conceal income made in 2016 by opening bank accounts in other people’s names, asking an accountant to file a tax extension that falsely reported no anticipated tax liability, and making fraudulent claims during an IRS audit in 2019.
Prosecutors provided evidence indicating that Powell failed to submit personal income tax returns for almost 15 years, earning more than $18 million during that time.
According to federal investigators, the revenue was mostly the result of Powell’s continued financial interest in The Powell Law Group, although he had previously surrendered ownership of the firm following criminal convictions. Powell was suspended from practicing law in 2009 and later disbarred in 2015, but he retained the majority of the firm’s future legal fees.
These fees included revenues from a huge mass tort settlement reached in 2015, which was worth more than $5 billion, with The Powell Law Group projected to receive around $120 million in attorneys’ fees. Prior to the settlement payout, the firm and its co-counsel secured more than $125 million in loans with the anticipated fees as security.
Prosecutors said Powell routed the loan proceeds into accounts he controlled rather than routing them via firm accounts to cover operational expenditures. The funds were used to pay off personal debts and support an extravagant lifestyle that included luxury vehicles, a sportfishing vessel, private school and college tuition, and the purchase and refurbishment of a multimillion-dollar Florida mansion.
Powell transferred ownership of the home to a business associate after discovering he was being investigated by the feds, but he and his wife have continued to live there without paying rent, authorities said.
Powell is also being investigated for comments he made during an IRS audit, in which he falsely claimed his income was primarily from loan advances and denied having authority over additional bank accounts or ownership interests.
Powell had previously served a federal prison sentence. In 2011, he was sentenced to 18 months in prison after pleading guilty to bribing two Luzerne County judges and assisting in concealing those payments from tax authorities—a case linked to the famed local judicial corruption scandal.
The IRS Criminal Investigation headed the investigation, with prosecutors from the US Department of Justice and the US Attorney’s Office for the Middle District of Pennsylvania managing the case.
