Retired Pennsylvania Attorney Sentenced To 48 Months In Federal Prison
A federal judge in Pennsylvania sentenced retired Pennsylvania Attorney Robert J. Powell To 4 Years In Prison. Federal prosecutors had accused Powell of tax evasion.
Court documents indicate Powell carried out his tax evasion scheme by using nominee bank accounts. This caused an accountant to file a request for a filing extension. The filing falsely reported zero estimated tax liability for 2016. Powells’s scheme also led to the account to make false statements during a subsequent IRS audit.
Powell was a disbarred Pennsylvania lawyer who moved to Palm Beach. However. he retained the right to collect a portion of future fees collected by his former firm. Namely, he represented thousands of plaintiffs in a mass tort litigation that settled for approximately $5.15 billion in 2015. Powell’s firm was expected to receive approximately $120 million in attorneys’ fees from that settlement.
How Powell Committed Fraud
Powell’s firm used the fees as collateral to obtain $125 million worth of loans. However, Powell and his former colleagues deposited the loan proceeds into firm bank accounts. Powell then directed the loans to nominee bank accounts under his control. He then used the loan proceeds to pay his personal debts and expenses. In addition, he also paid for the personal benefit of his former law partner and himself.
In June 2016, the law firm disbursed most of the attorneys’ fees. However, Powell did not file a personal income tax return and pay taxes on those the $3.6 million in fees.
Powell did not file personal tax returns from 2010 through 2022.
In 2019, the IRS audited Powell. During the audit, Powell made false statements in an attempt to conceal his income and expenditures. Specifically, Powell falsely informed the IRS that his only source of funds were loan advances. He also claimed he and his spouse did not have signature authority or control over other bank accounts. In addition, he claimed he had no ownership in any corporations. All of these statements were false.
In addition to his prison sentence, the court ordered Powell to serve three years of supervised release. In addition, the court ordered him to pay $3.5 million in restitution to the United States and a $100,000 fine.
This is not Powell’s first federal prison sentence. In 2011, a Pennsylvania judge sentenced Powell to 18 months behind bars. Powell pleaded guilty to bribing two Luzerne County judges. He also concealed those payments from tax authorities
