SCRANTON, PA – Robert J. Powell, a 65-year-old resident of Palm Beach, Florida, has pled guilty to tax evasion for the 2016 fiscal year. This charge relates to his handling of substantial legal fees earned through The Powell Law Group, P.C., based in Luzerne County. Powell appeared in federal district court today and was subsequently released on an unsecured bond pending sentencing.
Court documents reveal that Powell evaded taxes by utilizing nominee bank accounts, instructing an accountant to file a false request for a filing extension that reported no estimated tax liability for 2016, and making deceptive statements during a 2019 IRS audit. Powell was disbarred in 2015 and had relinquished ownership of The Powell Law Group in 2009, yet retained rights to collect 90% of future fees post-expense from the firm.
The Powell Law Group was involved in a mass tort litigation settled for approximately $5.15 billion in 2015, from which it expected to receive around $120 million in attorney’s fees. Prior to the fee disbursement, over $125 million in loans were secured using these anticipated fees as collateral. Contrary to proper handling, Powell directed these funds to his controlled nominee accounts for personal use.
Most of the attorney’s fees were disbursed and the loans repaid by June 2016. Despite this, Powell failed to file a personal income tax return or pay taxes on these earnings. From the initial disbursement in 2016 through October 2019, an additional $12 million in fees was received, with Powell personally gaining an extra $3.6 million, which also was not reported to the IRS. The case highlights significant misuse of legal and financial privileges, drawing attention to broader issues of compliance and ethics within the legal profession.